The Pioneer Valley exhibits the type of housing challenges that face both large cities as well as rural areas, all complicated by the needs of a substantial college/university population that places particular challenges on the housing market. With wages and incomes that are lower than the state, rates of cost burden, evictions, and foreclosures are high. Under most population scenarios the region is projected to lose population in the coming decades due to loss of young people to other states and declines in international immigration. Despite the decline, housing needs will continue to grow as Millennials form more households and Baby Boomers age well into Older Adulthood. In total, EOHLC projects that the region needs to add approximately 14,500 year-round homes to the existing stock over the next ten years, an increase of 5.5%.
Pioneer Valley Housing Overview
The Pioneer Valley Planning Commission oversees Hampden and Hampshire counties, serving 43 diverse municipalities. The region includes Springfield, the fourth most populous city in New England, as well as several smaller population centers situated along the I-91 and I-90 corridors, such as Westfield, Chicopee, Holyoke, Northampton and Amherst. The Pioneer Valley region is home to several educational institutions which either enroll or employ tens of thousands the of residents, including Smith College, Amherst College, Mount Holyoke College, Hampshire College, UMass Amherst, Westfield State University, and many other smaller private and community colleges. This student, faculty, and staff population is an important factor to consider in the regional housing market. Additionally, the population across the region is aging, which is particularly pronounced in suburban and rural portions of the region.
A notable challenge for the Pioneer Valley region is an inadequate and aging housing inventory. Investing in home repairs and updating properties to meet building code standards can be prohibitively expensive for property owners. Moreover, the region has relatively lower home sale and rental prices compared to the state, so landlords and investors have less incentive to rehabilitate older homes with smaller or nonexistent property value returns. Despite these challenges, home prices have gradually increased over time, while supply and vacancy rates have all decreased due to this limited inventory and inadequate production.
Renter cost burden in the region is higher than it is statewide, but three percentage points, and severe cost burden for renter households is 1.5 percentage points higher than the statewide average. High levels of cost burden for renters contribute to above average rates of eviction fillings. Foreclosure petitions in the region are also elevated, particularly in Hampden County—one of a few jurisdictions with eviction fillings rates (26.41) and foreclosure petition rates (2.4) higher than the state average. Springfield, a major city in the region, ranks as one of the cities with high foreclosure petition rates, “with 5.40 foreclosure petitions per 1,000 owner households and 151 foreclosure petitions over the last six months”. It is important to note that filings do not necessarily result in evictions or foreclosures; however, the data signals a trend of housing costs that are too burdensome for residents.
Pioneer Valley Region Housing Demand
The population of the Pioneer Valley region has grown modestly since 1990, adding between 0.9% and 2.2% per decade. These growth rates are much lower than the state overall, which grew by 7.7% in the 2010s while the Pioneer Valley added only 1.3% to its population. The most current population estimates (2024) indicate that the region’s population has declined since 2020, and baseline projections indicate that this will continue in the coming decades. Even the middle-series projection that assumes greater retention of young adults indicates that the region’s population could decline by 2.3% over the next decade. Forecasts also show that population trends are strongly influenced by the number of foreign-born residents, who make up a substantial share of the region. The high-series projections, which assumes higher levels of international immigration consistent with patterns from 2020 – 2024, anticipate that the population may grow out to the year 2035 and decline thereafter. Under all scenarios, the Older Adult population will continue to grow, increasing from an estimated 21% of the region’s population in 2025 to 25% of the total by 2035 in the middle series projection, growth of almost 20,000 Older Adults. Meanwhile, the under-40 population is projected to decline by 26,000 over that same period, continuing trends that have been in play since 2000.
Despite the projected declines in population, the number of households in the region is anticipated to grow by 9,000 households, an increase of about 3.5%. Driving this change is an increase of approximately 15,600 households headed by someone 70 or older. The number of households headed by someone 55 to 69 is projected to decline as Baby Boomers age out of this range and there are fewer Gen X residents to take their place. The region is also projected to see an increase of about 8,200 households headed by someone 40 – 54 as the oldest Millennials form families or settle down.
With the aging of the population, the Pioneer Valley is projected to see net declines in households at all income groups over $75,000 per year, driven in large part by declines in non-senior households without children. As noted above, this decline is due to the youngest Baby Boomers aging from their 60s into their 70s. There is projected to be an increase of over 7,000 older adults living alone, the vast majority of which may have incomes of less than $35,000 per year. The small net increase in the number of family households with children is attributable to new households formed by those who are currently doubled up and overcrowded or in shelters, almost all of whom are in the lowest income group.
In total, EOHLC projects that the region needs to add approximately 14,500 year-round homes to the existing stock over the next ten years. This includes about 6,000 homes to accommodate existing households who are doubled up and overcrowded, in the shelter system, or in otherwise unsuitable situations; and about 3,000 homes to accommodate new households. EOHLC estimates another 1,700 homes may be needed to compensate for the conversion of existing units to seasonal homes or short-term rentals; and approximately 3,800 homes available for sale or rent in order to achieve a healthy vacancy rate. Together, this projected housing demand is equivalent to about 5.5% of the 2020 housing stock.
Pioneer Valley Housing Strategies
TBD
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