A $1.7 billion public investment in Massachusetts’ most troubled housing markets could transform their economies and benefit the entire state. That’s the conclusion of a report released by MassInc this morning that tries to map the resurgence of so-called Gateway Cities like Springfield, Holyoke, and Pittsfield. New England Public Radio’s Fred Bever reports.
Find the report here:
One sobering chart in the report shows just how difficult the challenge is: in the state’s once-robust manufacturing towns, the cost of building or rehabilitating residential or commercial properties far outweighs the rent or sales prices they can fetch.
Co-author Ben Forman says urban redevelopment has become highly complex and expensive – with costs for remediation, parking and safety investments, and requirements for historic rehab.
“But I think the bigger issue is just that rents are low, because a lot of people don’t want to be in these places right now. I think that’s what we’re trying to correct over time by making smart investments and make them attractive and increase the demand so you can build and sustain a city.”
The time is ripe, Forman says, because Americans citizens and businesses are increasingly turning away from the suburbs in search of friendly, walkable neighborhoods. Plus, he says, borrowing costs are low – and the state would be wise to borrow big now to finance what he calls “transformative redevelopment.”
“Our housing markets are so constrained, such a drag on job creation that if we really want to compete in this recovery, I think we really need to think seriously about how we build the communities in the space that we need for our economy to grow in the near-term.”
MassInc’s proposals include loan guarantees, tax credits, equity insurance and other incentives for developers and residents who commit to gateway cities. And it also proposes a billion dollar state fund that would take an equity position in gateway development projects. That’s risky, Forman acknowledges, because there may be small or no return on that taxpayer investment – at least, that is, until communities are actually transformed by it.