Development Opportunities, Community Risks: How the Pandemic Has Created a New Balancing Act for Gateway Cities

By Dr. Tracy Corley and Tom Hopper

February 9, 2021

Introduction

Greater Boston has a chronic housing affordability problem, and increased housing supply is a key component of a regional strategy. However, investments in places and properties need to be accompanied by investments in people and communities in order to avoid inequitable outcomes. Fears that new development and infrastructure investments will push out long-time residents in communities of color have driven debate between local activists, municipal leadership and housing developers. For example, on Dec. 14, 2020, public media channel GBH ran a news story in which Mattapan renters described how improved transit service was pushing long-term residentsⁱ out of the predominantly Black Boston neighborhood. That investments in infrastructure can be seen by community members as a risk to their housing stability reveals a mismatch between the goals of these improvements and the needs of vulnerable communities. 

MassINC discussed these displacement fears in its 2020 report on equity in transit-oriented development.ⁱⁱ Strategies that support rather than supplant existing communities are a critical component of community development. Community activists and organizations such as the Boston Foundation have been grappling with how to develop desperately needed housing without displacing existing residents. While much of the attention has been focused on changes in the Boston inner core, less energy has been devoted to examining the impacts on Massachusetts’ 26 relatively lower-cost Gateway Cities. 

This brief takes a closer look at some new dynamics and increased pressures the pandemic has introduced in Gateway City communities, and explores what we can do to stabilize and engage existing Gateway City residents while fostering inclusive approaches to housing development. We’ll start by looking at a surprising dynamic from the pandemic: While rents have dropped in expensive inner core rental markets, rents have risen in lower-cost Gateway Cities.

As seen in Figure 1, rents in some lower-cost Gateway City markets have risen as much as 12 percent in Fall River while rents in inner core markets have dropped as much as 16.1 percent near Alewife Station. These numbers suggest that the pandemic may be making Gateway Cities relatively more attractive for two reasons. First, as households lose jobs and income, the relative affordability of these markets may be a significant draw for those no longer be able to afford their homes in more expensive areas. Second, as teleworking has become more common, and in some cases permanent, some may be looking to trade in small, expensive inner core homes for larger ones that offer lower costs, more square footage, and often more flexible space. Places across the country echo this dynamic; research from Harvard’s Joint Center for Housing Studiesⁱⁱⁱ has shown a surge in vacancies within “prime” urban areas during the pandemic that has been unmatched in suburban markets and other urban markets.

Figure 1: Comparison of rents in inner core and lower-cost markets

The urban infrastructure in Gateway Cities provides walkable downtowns and neighborhood centers that feel similar to some neighborhoods in the Boston inner core. Although large, expensive cities have experienced drops in demand during the pandemic, walkable, transit-oriented communities with nearby essentials like grocery stores remain highly desirable. The desire to live in communities where much of what one needs is within 15 minutes of home^iv makes Gateway Cities with flourishing downtowns and mixed-use districts attractive to urbanites. This trend of people seeking more space and lower costs could bring Gateway Cities more revenue from increased demand for housing and supporting non-residential spaces, such as commercial properties, co-working spaces, community spaces, and other amenities.^v

Despite these highlights, increased housing demand in the Gateways is not all good news. Tight markets and rising rents create affordability problems and can spur displacement. On top of this shift in market dynamics, Gateway renters and homeowners are at an elevated risk of eviction or foreclosure because the pandemic has disproportionately undermined their livelihoods. Figure 2 shows that job and income losses have been more acute in Gateway Cities than in the rest of the state. As of Nov. 2020, the unemployment rate in all Gateways except Westfield, Attleborough and Peabody were higher than the state rate of 6.2 percent. In fact, roughly 32 percent of the year-over-year increase in unemployment across Massachusetts has been in the Gateway Cities, despite their workers making up just 25 percent of the state’s labor force.

Figure 2: Unemployment across Massachusetts and the Gateway Cities

In Gateway Cities, workers are more likely to engage in low-wage, high-contact service or essential jobs such as health care technicians or grocery store workers. A high share of these vulnerable positions are held by Black and Latinx residents, which means that job and income losses due to pay cuts, hour reductions, layoffs and furloughs are more likely to be felt by people of color. What’s more, Gateway City residents are less likely than non-Gateway residents to work in telework-friendly professional jobs,^vi which tend to pay better, require higher skills, and are less likely to have been cut during the pandemic. Figure 3 illustrates the industries that employ Gateway City workers. By comparison, Massachusetts’ professional, scientific and technical services (PSTS) sector and information sector had the highest percentages of employees who work from home—11.35 percent and 10.91 percent, respectively. Yet, the share of these workers across the 26 Gateway Cities averaged 5.4 percent in the PSTS sector and just 1.6 percent in the information sector. Suburban workers are more likely to have jobs that allow them to work remotely.

Figure 3: Teleworking

High unemployment and underemployment rates put Gateway City residents at a higher risk of falling behind on rent, increasing the likelihood of eviction. Strong local demand for rental housing increases the incentive for landlords to evict a non-paying tenant as quickly as possible rather than try to work out a payment plan or accept rental assistance. Historically, eviction rates have been very high in Gateway Cities,^vii and new filings for non-payment of rent since the end of the state’s eviction moratorium in October have continued to follow this pattern.

Together, these indicators of consistent demand, rising prices and high eviction rates affirm anxiety about displacement. Widespread displacement could bring long-term instability in the housing market despite near-term demand for more development. Studies have shown that supply alone is insufficient for achieving equitable and enduring economic development: asset building and housing retention must also be top priorities.^viii Gateway City growth and stability depends on keeping current residents in their homes, whether they rent or own. Displaced individuals suffer direct mental and physical health effects^ix from the disruptions and lack of connection to their social and economic environments.^x  Displacement also unravels social infrastructure by dismantling the networks and places that make the community vibrant. Fewer attachments to neighborhoods and neighbors result in loneliness, isolation, and lower participation in public life. This feeling of exclusion leads to lower levels of trust and smaller social networks, resulting in higher incidents of crime, public health burdens, and suicides regardless of wealth or income levels.^xi These compounding costs of displacement can be enormous to Gateway Cities.

Complementing development with community supports and civic engagement for more equitable outcomes

Changing market dynamics that improve the feasibility of multifamily development offer an opportunity to bolster the local housing stock in Gateway Cities. However, the way in which these market pressures interact with local politics and community engagement processes can influence what gets built and can be a deciding factor in who ultimately reaps the benefits of real estate development. Without a focus on community engagement, planning for equity, and anti-displacement strategies, unfettered development may stoke fears of displacement and neglect how changes in the local housing market intersect with various other needs of economically vulnerable populations and neighborhoods. Many thought leaders have been investigating solutions to keeping residents in place, but their efforts often focus on large, global cities like Boston. We’d like to propose a few considerations for smaller, low-wealth cities like Gateway Cities.

• Not all housing problems can be solved with housing interventions: Income solutions required. Income loss, high housing costs and community loss require complementary programs and policies to bridge the gap. A summer 2020 poll from the MassINC Polling Group found that the number-one need for small businesses is cash. The same can be said for households. Gateway City residents are more likely to pay more than 45 percent of their household income on rent and transportation.^xii  When earnings and other liquid assets fail to meet basic needs like food, housing instability is sure to follow.^xiii  However resource-strapped they might be, Gateway Cities have been working with public and private sector partners to find solutions that address more than just housing. The City of Chelsea has implemented a Cash Assistance Program^xiv to address hunger, a growing problem with families skipping meals to make rent or mortgage payments. Providing residents with cash enables households to navigate their unique circumstances, filling the resource gaps where they see fit. The intersections of healthcare, childcare, eldercare, food security, housing, transportation and other basic needs vary with each household, and cash payments allow for the most flexible way to address these complex problems. Giving households more agency also saves the city money. Instead of creating unwieldy, complex programs with bureaucratic structures, it may be more effective to put resources directly into the hands of residents so that they can decide how best to meet their basic needs and in doing so invest back in the community.
• Institutions and decision makers must make it easier for individuals to participate in civic and economic life. Local connections and a sense of belonging are critical to stopping displacement. Current economic development policies and practices often prioritize large developments with market rate or luxury housing to attract new residents, especially retiring seniors or young adults without children. This approach positions Gateway Cities as bedroom communities, or suburban-like enclaves of housing for Boston’s core. As a result, many economic development strategies advance policies where much of the benefit—and investment—comes from outside the community. Such strategies expand revenue through new development fees, property taxes and higher-wealth residents spending disposable income, but decrease the spending power, and eventually drive out existing residents. As an example, community leaders in Brockton report an influx of residents displaced out of low-wealth neighborhoods in Boston, while existing residents who can no longer find affordable housing seek homes further south in urban communities like Fall River. The churn of replacing existing low- and moderate-wealth residents with new, higher-wealth ones generates neighborhood instability where few forge deep connections to their local communities. Some market-rate developments in cities even market their shuttles to Downtown Boston and resident-only facilities as key amenities. Gateway Cities can stop this churn and stabilize neighborhoods by encouraging local ownership. Strategies that advance small site developments and a mix of incentives like those proposed in MassINC’s Neighborhood Stabilization Report^xv can increase small developer participation in creating and revitalizing local community fabric. Such an approach is emerging in Lawrence, where a small business ecosystem of local development professionals has collaborated on small-site and scattered-site projects while sharing resources to navigate state and federal program requirements. This collaborative effort, supported by MassDevelopment’s newly-created TDI Emerging Developers program,^xvi has created more local ownership among those who live and maintain strong kinship and friendship ties within the city. Such ties, along with excellent social infrastructure,^xvii are necessary for resilient cities to come together in times of hardship or crisis, which Lawrence has repeatedly demonstrated.^xviii Local ownership and investment in development also help break through the strong anti-growth alliance^xix that currently stalls development, and help direct development’s benefits to current and future residents alike.
• For local control to be meaningful, all residents must actively participate in planning their communities. It’s no surprise that historically marginalized residents are aligning with NIMBY factions to stop development. When people feel left out of decision-making processes, the end goal becomes inconsequential: Even the best-designed, well-intentioned project will be viewed with skepticism. As MassINC discussed in its report about equitable transit-oriented development,^xx  municipalities and regions must rethink planning processes. Local jurisdictions should consider shifting their roles from “doing” planning to being facilitators of community-led planning efforts that prioritize low-wealth neighborhoods of color. Although community engagement has become a requirement in many planning processes, the level of engagement focuses on getting input at a handful of public meetings or workshops with very little commitment to incorporating that feedback into the final plan. In contrast, community-led planning engages the district’s residents and business owners in vision setting, decision making, solution building and project implementation. Relinquishing control of planning can seem unthinkable given the history of municipal planning. But some cities are changing that. For example, Providence, Rhode Island successfully ceded leadership of its sustainability planning process to a citizen-led committee, resulting in better-thought-out infrastructure projects and programs. Since community stakeholders worked closely with the city experts to create the Climate Justice Plan,^xxi  few were left to object to proposed projects and developments that fit with the plan’s guidelines. In Massachusetts, the city of Lynn has also shifted its role, working with CHAPA and MAPC to facilitate the development of a housing production plan.^xxii  The process has brought together city leaders, local developers, community activists and residents to craft the plan, but it’s also helping heal a long-fractured relationship between city leadership and local residents. As an added bonus, shifting the government from municipal-led planning administrator to community-led planning facilitator eases the city’s resource burdens for planning and shifts dollars to local community groups and members, thereby improving the economic conditions of area residents and reinvesting city dollars locally.

Given the necessity of complementing housing supply with asset building and local engagement, it is important to create a framework for equitable and inclusive development before the market gets away from us. Rents change rapidly. If we don’t think creatively about how to address the narrowing of the market and how to share successes from the opportunities that rising rents in the Gateway Cities present, then we risk losing the promise and potential of diverse, connected, affordable communities that residents new and old can call home.

ⁱ McKim, Jennifer; Lugli, Stefania. “They Want to Push Us Out: Mattapan Renters Fear Eviction As New Rail Stops Drive Rent Increases.” GBH News, December 14, 2020. https://www.wgbh.org/news/local-news/2020/12/14/they-want-to-push-us-out-mattapan-renters-fear-eviction-as-new-rail-stops-drive-rent-increases

ⁱⁱ Corley, Tracy A.; Forman, Ben; Haney, Elizabeth; Tumber, Catherine. “From Transaction to Transformative: The Case for Equity in Gateway City Transit-Oriented Development.” MassINC. May 18, 2020. https://www.massinc.org/research/equity-report

ⁱⁱⁱ Joint Center for Housing Studies of Harvard University. “The State of the Nation’s Housing 2020.” https://www.jchs.harvard.edu/sites/default/files/reports/files/Harvard_JCHS_The_State_of_the_Nations_Housing_2020_Report_Revised_120720.pdf

^iv C40 Cities Climate Leadership Group. “How to build back better with a 15-minute city.” C40 Knowledge Hub. July 2020. https://www.c40knowledgehub.org/s/article/How-to-build-back-better-with-a-15-minute-city?language=en_US

^v Hamberg, Maya; Hutchinson, Claire; Corley, Tracy A. “Are coworking spaces the key to transforming Gateway Cities?” MassINC. Dec. 3, 2020. https://massinc.org/2020/12/03/are-coworking-spaces-the-key-to-transforming-gateway-cities/

^vi Desilver, Drew. “Before the coronavirus, telework was an optional benefit, mostly for the affluent few.” Pew Research Center. Mar. 20, 2020. https://www.pewresearch.org/fact-tank/2020/03/20/before-the-coronavirus-telework-was-an-optional-benefit-mostly-for-the-affluent-few/

^vii Gupta, Samarth. “Eviction rates alarming in Gateway Cities.” Commonwealth Magaizine. Mar 30, 2019. https://commonwealthmagazine.org/opinion/eviction-rates-alarming-in-gateway-cities/

^viii Levy, Diane; Comey, Jennifer; Padilla, Sandra. “In the Face of Gentrification: Case Studies of Local Efforts to Mitigate Displacement.” Urban Institute. 2006. https://www.urban.org/sites/default/files/publication/50791/411294-In-the-Face-of-Gentrification.PDF

^ix Cooper-McCann R, Ayers C, Berrigan D, Lian M, McClurkin M, Ballard-Barbash R, Das SR, Hoehner CM, Leonard T. “Change in Neighborhood Socioeconomic Status and Weight Gain: Dallas Heart Study.”
Am J Prev Med. Powell-Wiley TM, 2015 Jul; 49(1):72-9.;
Freeman L, Branconi F. “Gentrification and displacement: New York City in the 1990s.” J Am Plann Assoc 2004;70(1):39–52.;
"Weathering HOPE VI: the importance of evaluating the population health impact of public housing demolition and displacement.” Keene DE, Geronimus AT. J Urban Health. 2011 Jun; 88(3):417-35.

^x PolicyLink. “Reducing Health Disparities Through a Focus on Communities.” 2002. https://www.policylink.org/sites/default/files/REDUCINGHEALTHDISPARITIES_FINAL.PDF

^xi Fowler, K. A., Gladden, R. M., Vagi, K. J., Barnes, J., & Frazier, L. “Increase in suicides associated with home eviction and foreclosure during the US housing crisis: findings from 16 National Violent Death Reporting System States, 2005-2010.” 2015. American journal of public health, 105(2), 311–316. https://doi.org/10.2105/AJPH.2014.301945

^xii The Center for Neighborhood Technologies and other institutions consider households that pay more than 30 percent of income on housing or 15 percent on transportation as burdened.

^xiii PolicyLink. “Reducing Health Disparities Through a Focus on Communities.”

^xiv GBH News. “Chelsea To Begin Directing Assistance Stipend Program For Families In Need.” Oct, 19, 2020. https://www.wgbh.org/news/local-news/2020/10/19/chelsea-to-begin-direct-assistance-stipend-program-for-families-in-need#:~:text=Next month, the city of,concept of Universal Basic Income.

^xv Forman, Ben; Mallach, Alan. “Building Communities of Promise and Possibility.” MassINC. Jan. 8, 2019. https://massinc.org/research/building-communities-of-promise-and-possibility/

^xvi MassDevelopment. “Transformative Development Initiative.” https://www.massdevelopment.com/what-we-offer/key-initiatives/tdi/

^xvii Florida, Richard. “How ‘Social Infrastructure’ Can Knit America Together.” Bloomberg CityLab. Sep. 11, 2018. https://www.bloomberg.com/news/articles/2018-09-11/our-libraries-and-schools-are-vital-social-infrastructure

^xviii Porter, Eduardo. “One City’s Road to Recovery Offers Lessons, and Hope.” The New York Times. Mar. 24, 2020. https://www.nytimes.com/2020/03/24/business/economy/small-cities-economy.html

^xix Anbinder, Jacob. “The Pandemic Disproved Urban Progressives’ Theory About Gentrification.” The Atlantic. Jan. 2, 2021. https://www.theatlantic.com/ideas/archive/2021/01/anti-growth-alliance-fueled-urban-gentrification/617525/

^xx Corley, Tracy A.; Forman, Ben; Haney, Elizabeth; Tumber, Catherine. “From Transaction to Transformative: The Case for Equity in Gateway City Transit-Oriented Development.” MassINC. May 18, 2020. https://www.massinc.org/research/equity-report

^xxi City of Providence. “Climate Justice Plan.” Fall 2019. https://www.providenceri.gov/sustainability/climate-justice-action-plan-providence/

^xxii Metropolitan Area Planning Council. “Housing Lynn: A Plan for Inclusive Growth.” https://www.mapc.org/resource-library/housing-lynn/