Central Massachusetts includes a wide range of communities, from New England’s second-largest city to sparsely developed rural towns. Encompassing the southern two-thirds of Worcester County, the region has seen home prices escalating over recent decades as households priced out of Greater Boston have driven up demand. The City of Worcester has been a leader in new production, permitting nearly 1,000 homes per year. EOHLC estimates that the CMRPC region needs to add 20,500 housing units to the stock from 2025 – 2035, equal to 8.4% of the 2020 housing unit total.
Regional Conditions
The Central Massachusetts region is home to City of Worcester and 39 surrounding towns that range from suburbs on the western edge of the Boston region to rural towns near the Pioneer Valley. 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, which runs through the southeastern corner of the region, played a pivotal role in the area’s historic industrial development, powering textile and manufacturing operations that attracted people to Central Massachusetts. Most municipalities in Central Massachusetts lack diverse housing choices, and high housing costs are a burden for many households.
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 while 36% are renter-occupied units. Worcester and Southbridge are the only municipalities with more renter-occupied units than owner-occupied units. In fact, more than half of the region’s rental housing is in the City of Worcester. Meanwhile, many towns in the region have a very small share of rental homes. Affordability is a major challenge across many communities, particularly in and around Worcester, where access to jobs and transit increase housing demand and costs. As of 2023, just four of the region’s 40 municipalities meet the 10% Subsidized Housing Inventory threshold (Berlin, Northborough, Westborough, and Worcester). Half of the region’s municipalities have fewer than 5% of their homes eligible for listing on the SHI.
Housing prices have risen rapidly in Central Massachusetts as households have sought out more spacious communities and 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 reached $410,000 in 2023 (the most recent data available), representing an increase of 68% in inflation-adjusted terms since 2012. Over the same period, AMI for the Worcester Fair Market Rent Area increased by only 11.4% after adjusting for inflation. The erosion of lower-cost homes is particularly striking. In 2012, 25% of single-family homes and condos in the region sold for less than $164,000 (in 2023 dollars), making 85% of the home sales attainable for households earning 100% of AMI (approximately $110,000 for a family of four in 2023 dollars.) A household). Households earning 80% of AMI could afford 67% of home sales in 2012. 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.
Note: An attainable purchase is one that costs less than 30% of income after accounting for interest rates, estimated property taxes, insurance, PMI, and other costs.
Escalating housing costs have resulted in widespread affordability issues throughout the area. Approximately 24% of owners and nearly 50% of renters in Central Mass are cost burdened, with almost one in four rental households facing severe cost burden by spending more than half their income on rent and utilities. In Worcester, over 11,500 renters are severely cost burdened, accounting for more than 25% of the city’s rental population. Increasing housing costs and affordability issues are due to a shortage of available homes. Only 1.8% of homes are available for sale or rent, well below what is typically considered a “healthy vacancy rate” of 4-6% that allows people to secure housing when they need to move. There were only 1,500 homes for sale in the entire Worcester 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%.
The low-density nature of the region and the lack of robust transit options outside of Worcester result in substantial transportation costs for Central Massachusetts residents. The typical Worcester County household spends $15,700 on transportation annually, averaging 18% of household income.
Central Massachusetts municipalities reported permitting 1,020 homes in 2023, slightly below the ten-year average of 1,185. The City of Worcester has been a regional leader, adding 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, with only 1,900 homes for rent between 2019 - 2023 (ACS) versus 2,600 between 2010 - 2014 (ACS).
Projections and Housing Needs
The Central Massachusetts region has experienced steady population growth since 1990, adding 35,000 to 50,000 people in each of the three subsequent decades (reflecting an increase of 7.4% - 8.7%.) Growth in the coming years, however, is expected to be much slower due to the demographic shifts and policy challenges affecting Massachusetts’ population growth. UMDI projects that the region will add between 3,000 and 21,000 people from 2025 – 2035, depending on the possible scenarios. The middle series scenario used in 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. The Statewide Housing Plan Projections indicate that the region may add 15,900 households in the next ten years, an increase of 6.5%. Notably, the region anticipates substantial increases in households among two age groups: an additional 10,000 households headed by individuals aged 35 – 54, a group that is has been attracted to the region’s relatively moderate home prices and proximity to job centers; and an increase of 14,800 households headed by individuals 70 or over, resulting from the aging Baby Boomer generation. Households under 35, however, are projected to decline (consistent with the rest of the state) along with households aged 55 –70, as Baby Boomers age out of this age bracket and the smaller Gen X group ages in.
Almost half of the net increase in households will be among households with incomes below $35,000 per year, mostly older adults living alone. Older adults living alone represent a substantial segment of projected household growth, especially among those earning between $35,000 - $125,000. Additional households with children are projected across all income levels; while non-senior households without children are projected to decline (partially 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 CMRPC 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.
Planning and Policy Efforts
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. 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.
External Resources:
- Central Mass Regional Planning Commission: https://cmrpc.org/