Berkshire County faces many housing challenges, including a lack of affordable housing, conversion of existing homes into seasonal or short-term rentals; an older housing inventory; lower household incomes; and a lack of new housing supply. One in eight homes serve as seasonal or occasional rentals, and home prices increased by 76% during the past ten years, even after inflation adjustments. Although the region’s population is projected to continue the decline that has been underway for the past three decades, the number of households is anticipated to grow slightly. After factoring in additional homes needed to achieve and maintain a healthy vacancy rate, EOHLC estimates that Berkshire County will need to add at least 1,300 homes to the year-round housing stock over the next decade, and as many as 2,500 homes if population growth accelerates.
Regional Conditions
The Berkshire County region contains 32 cities and towns with village centers, downtowns, neighborhoods, and cultural institutions nestled among scenic rural and forested areas. While the region is more rural in character than much of the state, it is also home to the Gateway City of Pittsfield. Once an industrial powerhouse, the county has experienced population and employment losses since the 1970s, reducing housing demand as well as residents’ capacity to afford available homes. Even though homes cost less than they do in Eastern Massachusetts, incomes are lower: only 21% of Berkshire County renters earn over $75,000 per year, as compared to 40% of renters statewide (all data 2018-2022 ACS). The region faces significant barriers to affordable housing: one in four renters is severely cost-burdened, along with one in ten homeowners.
In Berkshire County, the median sale price for single-family homes and condos rose from $295,000 in 2012 to $518,900 in 2021 – a 76% increase. While prices are rising, demand is still not strong enough to drive substantial development: only 1,500 new homes were built in the last 10 years, resulting in a housing stock increase of just 2%. Only 1.4% of homes in Berkshire County are available for sale or rent, just below the statewide average and well below a “healthy” vacancy rate that allows people to find housing when relocating. In some towns there are effectively no homes available for prospective renters.
Berkshire County is a popular tourist destination. This fact is reflected in the share of housing units that are seasonally vacant: approximately 12% of the total housing stock, the highest share outside the Cape and Islands. In many towns, seasonal and vacation homes exceed 25% or even 50% of the total housing inventory. These seasonally vacant homes are not available for permanent resident use and create additional pressure on the remaining year-round housing supply. Many communities also experienced an influx of residents purchasing homes or moving into second homes during the COVID-19 pandemic. Long-term effects of this influx have yet to be determined.
The development of affordable housing has progressed slowly, with deed-restricted affordable units remaining scarce. Just two municipalities in the region have met the state’s 10% affordable housing goal. Nonprofit housing developers report a variety of obstacles to building lower-income units. Due to the relatively low Area Median Income (AMI), rental income from even moderately affordable units (e.g. those affordable to households earning 80% of AMI) is often insufficient to make the financing work. Nonprofit developers in the region report that this challenge is reportedly compounded by cost standards required for LIHTC funding. The regional housing plan provides several strategies for educating residents about affordable housing needs and obtaining additional funding, support services, and new construction projects.
Much of the region’s current housing stock is aged and in need of investment. About 65% of housing was built before 1970, compared to 57% statewide. Many homes do not meet current or modern building code standards and require significant financial resources to rehabilitate. Some of the region’s communities have enacted local rental inspection programs (Adams, North Adams, and Williamstown), and the regional plan recommends other municipalities do the same. The Abandoned Housing Initiative and the Regional Housing Rehabilitation Program are designed to help get housing back online.
Projections and Housing Need
Berkshire County’s population has been declining for decades, having fallen 7.5% from 1990 to 2020. All three of the population scenarios prepared for this plan anticipated continued declines in population over the next ten years, ranging from -5.0% for the low series projections to -1.5% for the high series. The high series projections assume increased population growth statewide and increased migration to lower-cost regions such as Berkshire County. Even under these more optimistic assumptions, Berkshire County would be projected to lose 1,900 residents between 2025 and 2035, as compared to a decline of nearly 6,200 in the low series scenario.
The region isn’t likely to see as drastic a decline in households, due to the aging of the population and more single person households. The State Housing Plan Projections forecast a decline of -0.7%, or about 400 households. These projections anticipate a net decline of 3,100 households headed by someone under the age of 75, and an increase of 2,700 in the number of householders 75 and over—a 30% increase. This will create significant needs for senior housing and services in the region.
Most of the net growth in older households is projected to be low-income older adults living alone, a segment projected to increase by 700 households. The number of non-senior householders is projected to decline across all income groups.
While housing demand is not growing dramatically in Berkshire County, many existing year-round homes are at risk. EOHLC estimates that the county may lose 1,500 homes to seasonal use or short-term rentals over the next decade. Other homes are threatened by deferred maintenance and natural hazards. Without new production, the region could see a substantial decline in the number of year-round homes, resulting in fewer options and higher costs for local residents. If the region sees a continued influx of residents, the number of households could grow—by as much as 1.3% in the high-growth scenario. After factoring in additional homes needed to achieve and maintain a healthy vacancy rate, EOHLC estimates that the Berkshire region will need to add at least 1,300 homes to the year-round housing stock over the next decade, and as many as 2,500 homes under the high series population projection.
Planning and Policy Efforts
Recent reports highlight a rise in speculative purchases by investors to transform homes into short-term rental properties, compounding the existing shortage of quality year-round housing supply in the region. One-eighth of homes in Berkshire County are actively-used short-term rentals, according to DOR. The regional plan encourages municipalities to explore fees such as Room Occupancy Excise Taxes on short-term rentals, directing the revenue to affordable housing. Some Berkshire municipalities have implemented additional restrictions on short-term rentals. For example, Great Barrington restricts corporate ownership of short-term rental properties among other stipulations. These policies may increase the supply of year-round housing by discouraging short-term rental activity, but they are still in their infancy and their impact is not yet fully understood.
Public infrastructure capacity (water, sewer, electrical utility lines) presents significant challenges for new housing development. In the Berkshires, only about 4.6% of vacant land is served by public utilities. Furthermore, the region’s topography and presence of critical natural resources results in a tension between housing development and conservation. The region’s municipalities may find it challenging to work with private developers to strategically site new developments in areas that are most efficiently served by public infrastructure. Denser developments in existing centers will be key to preserving the region’s unique landscapes and historic development patterns.
External Resources:
- Berkshire County Regional Planning Commission: https://berkshireplanning.org/
- Berkshire Regional Planning Commission. (2022). A Housing Vision for the Berkshires Regional Housing Strategy. berkshireplanning.org/wp-content/uploads/2022/04/A-Housing-Vision-for-the-Berkshires.pdf