Central Massachusetts has seen escalating home prices over recent decades as households priced out of Greater Boston have driven up demand. Worcester has been a leader new production, permitting nearly 1,000 homes per year. EOHLC estimates that the CRPC region needs to add 20,500 housing units to the stock from 2025 – 2035, equal to 8.4% of the 2020 housing unit total.
Central Massachusetts Housing Overview
The Central Massachusetts region is home to 40 cities and towns, including the City of Worcester. Worcester is known as the “Heart of the Commonwealth” and is the economic center and transit hub for the region. It is the second largest city in New England by population. The Blackstone River that runs through the region played a pivotal role in bringing industry, like textile and manufacturing, and people to the area. Most municipalities in Central Massachusetts have a limited diversity of housing choices, and high housing costs are a challenge for households across the state.
Most homes in the region are owner-occupied. In 2022, the CMRPC region had an estimated 229,400 occupied housing units. Approximately 64% are owner-occupied and 36% are renter occupied units.[1] Though some municipalities are more closely split, Worcester is the only municipality with a higher share of renter-occupied units compared to owner-occupied units.[2] Affordability is a key challenge in many communities, particularly in and around Worcester, in areas with closer proximity to many jobs and access to transit. As of 2023, just four of the region’s 40 municipalities meet the 10% Subsidized Housing Inventory threshold (Berlin, Northborough, Westborough, Worcester).
Housing prices have risen rapidly in Central Massachusetts as people priced out of Metro Boston have sought more affordable housing in the area. The median price for a single family home or condo in the CMRPC region in 2023 (the most recent year for which data are available) was $410,000, an increase of 68% in inflation adjusted terms from 2012. Over the same period, AMI for the Worcester Fair Market Rent Area increased by only 11.4% in real dollar terms. The loss of lower-cost homes is particularly striking: in 2012, one quarter of the single family homes or condos in the region sold for less than $164,000 (in 2023 dollars), and 85% of the home sales would have been available to a household earning 100% of AMI for their household size (about $110,000 for a family of four, in 2023$), and a household at 80% of AMI would have been able to afford 67% of home sales. By 2023, only 49% of sales were affordable to a median income household, and only 24% were affordable to a household at 80% of AMI.
As a result of increasing prices, cost burden is a major issue. About 24% of owners and nearly 50% of renters in Central Mass are cost burdened. Almost 1 out of 4 renter households is "severely" cost burdened, spending more than half their income on rent and utilities. In Worcester, over 11,500 renters are severely cost burdened—more than one quarter of all renters in the city. High prices and cost burden are due to a shortage of available homes. Only 1.8% of homes are available for sale or rent, well below a “healthy vacancy rate” of 4-6% that allows people to find a home when they’re ready to move. There were only 1,500 homes for sale in the entire metropolitan statistical area in June 2023 – less than half as many as were for sale in June 2019. This means there is intense competition for the few units that are available. In many Worcester County cities and towns, the effective vacancy rate is less than 0.5%.
Central Mass municipalities reported permitting 1,020 homes in 2023, slightly below the ten-year average of 1,185. Worcester has been a regional leader, adding added 9,600 housing units from 2010 - 2020, an increase of nearly 13%. This is nearly double the statewide increase of 6.8% in housing units. Worcester has continued to add homes at a rapid clip, issuing permits for a reported 2,202 new units from 2021 through 2024. Nevertheless, the pressure is still on, and more homes are needed. The number of homes for rent is still 25% less than it was ten years ago (2,600 in 2010 - 2014 ACS vs 1,900 2019 - 2023 ACS.)
Central Massachusetts Housing Demand
The population of the Central Massachusetts region has grown steadily since 1990, adding 35,000 to 50,000 people in each of the three full decades since then (equal to an increase of 7.4% - 8.7%.) Growth in the coming years is expected to be much slower due to the demographic and policy headwinds facing Massachusetts population growth. UMDI projects that the region’s population will grow between 3,000 and 21,000 people between 2025 – 2035, depending on the scenario. The Competing and Growing scenario used for this housing plan forecasts an increase of 9,000 people over those ten years, a growth rate of 1.5%.
Due to declining household sizes, the number of households is projected to grow much faster than population. In the Competing and Growing scenario, the region is projected to add 15,900 households, an increase of 6.5%. Notably, the region is likely to see large increases in households among two age groups: growth of 10,000 households headed by someone 35 – 54, a group that is has been attracted to the region for its relatively moderate home prices and proximity to job centers; and an increase of 14,800 households headed by someone 70 or over, growth that results from the aging of the Baby Boomer generation. Households under 35 are projected to decline (like the rest of the state) as are those between the ages of 55 – 70, as Baby Boomers age into their later years.
Almost half of the net increase in households will be among households with incomes below $35,000 per year, mostly Older Adults living alone. Multiple Older Adults living alone are also a substantial component of household growth, mostly in the $35,000 - $125,000 income band. Additional households with children are projected across all income levels; and it is anticipated that the number of non-Older Adult households without children are projected to decline (some of this is due to Baby Boomers age 55 – 64 aging into their Older Adult years.)
After accounting for an additional 4,700 units for sale or for rent needed to achieve a healthy vacancy rate, EOHLC estimates that the CRPC region needs to add 20,500 housing units to the stock from 2025 – 2035, equal to 8.4% of the 2020 housing unit total. The higher growth scenario could require as many as 25,000 new units.
Central Mass Housing Strategies
To support housing strategies in the smaller, more suburban communities in the region, CMRPC hosts a Regional Housing Coordinator Program. This program supports local Affordable Housing Trusts and Community Preservation Committees to advance sustainable and community focused housing development. One strategy being explored to support housing production in Worcester is reducing permitting barriers to smaller infill housing typologies through developing a menu of pre-approved housing types that are economically feasible and compliant with applicable building requirements, like the Specialized Stretch Code.[1] Because plans are already vetted according to local and state guidelines, project delivery is significantly faster; delays due to plan review and zoning relief can be sharply reduced.
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