2025 Gateway City Housing Monitor | Chapter 3: Conditions for Growth

This analysis measures whether rental income and sale prices in each Gateway City are sufficient to cover the full costs of acquiring land and constructing new housing. Comparing development costs to market values exposes the “capital gap” and provides an indication of how much subsidy will be required to make projects financially feasible.

Tracking the capital gap shows whether the private market can feasibly build the housing that Gateway Cities need to stabilize prices.

Land acquisition was assumed to represent 20 percent of total costs, while construction costs were derived from RS Means estimates for a six-story multifamily building, adjusted with local price factors. The model pro forma assumes annual operating expenses of $10,000 per unit per year. Net operating income was estimated by subtracting standard operating costs from annual rent (HUD 50^th percentile fair market rents for a two-bedroom apartment). This figure was then capitalized using an 8 percent rate, which represents the return investors typically expect for properties in comparable markets. Dividing income by this rate yields an income-based valuation of the unit. Comparing this valuation to development costs revealed the capital gap for rental projects.

For the ownership scenario, market values were estimated using the Zillow Home Value Index per square foot for condominiums, normalized by average unit size in each city. The for-sale capital gap was then calculated as the difference between market price and development cost, scaled to a typical 1,200 square foot condominium unit. To improve the comparison between rental and for-sale properties, this year’s analysis also includes a $10,000 per unit contribution to reserves (all comparisons to last year’s estimates also include this additional expense).

This data tracks the financial tools Gateway Cities can use to reduce the cost of housing production and make projects viable. Each measure reflects a different funding source or local option:

• Housing Development Incentive Program (HDIP): A state program that provides tax incentives to developers of market-rate housing in Gateway Cities; municipalities must opt in by creating an HDIP district, which can cover part or all of the city.
• Community Preservation Act (CPA): A local property tax surcharge that raises funds for historic preservation, open space, and housing. Cities adopting the CPA can choose how to allocate funds, but at least 10 percent must go to housing.
• Community Development Block Grants (CDBG): Federal funds that cities can award to local Community-Based Development Organizations (CBDOs) to support housing construction and neighborhood revitalization.
• HUD HOME Investment Partnerships Program (HOME): The largest federal block grant for affordable housing, administered by cities or regional consortia, and used for new housing development as well as rehabilitation.
• Municipal Affordable Housing Trust Fund: A local fund that cities can establish to collect and deploy revenue specifically for affordable housing development.
• Urban Center Housing Tax Increment Financing (UCH-TIF): A state program allowing cities to offer property tax exemptions to encourage private investment in mixed-use and residential projects in urban centers.

Together, these measures show which state, federal, and local resources cities are using—or not using—to offset development costs and attract new housing investment.

Public incentives play an important role closing financial gaps. Making this information visible helps developers better navigate the complex funding landscape, while encouraging learning and even a bit of healthy competition among Gateway Cities striving to draw private investment to residential development.

The MassINC Policy Center collected these data through an annual housing survey and consultation with state agencies. Attleboro and Fall River did not respond to the 2025 survey; as a result, this analysis relies on their 2024 responses.

These data track the zoning and permitting reforms that Gateway Cities have adopted to make it easier and more predictable to build housing. Each measure removes a different barrier or creates a new pathway for development. By increasing predictability and reducing delays, these reforms can lower the cost of capital as well as carrying costs:

• Reduced parking minimums: Lower the cost of new construction by requiring fewer parking spaces per unit. They also free up land and resources for housing. In some cases, high parking requirements can make the residential or mixed-use redevelopment of existing commercial buildings impossible on the existing footprint.
• By-right multifamily zoning: Allows larger projects to proceed without a special permit or discretionary review.
• Expedited permitting: Shortens approval timelines for multifamily housing.
• Master planning or pre-permitting: Designates areas where multifamily housing is already cleared through local planning, creating “shovel-ready” sites.
• Duplexes allowed by-right: Makes it easier to build two-family homes on most residential parcels, a traditional form of housing in Gateway Cities.
• Three-family buildings allowed by-right: Extends this flexibility to triple-deckers, another iconic and efficient New England housing type.
• Density bonuses and regulatory relief: Give developers incentives to include affordable units by allowing them to build more housing than zoning would normally permit.

Together, these measures capture the extent to which local zoning rules either enable or restrict different kinds of housing production, from large-scale multifamily development to incremental neighborhood growth.

Financing tools can help close gaps, but no amount of subsidy can overcome local rules that make housing illegal or impractical to build. Zoning and permitting reforms are therefore foundational: they establish whether new housing is even possible, and at what scale. By comparing Gateway Cities, this data makes visible where local governments are lowering barriers and where restrictive land use regulation holds back growth. Sharing this information not only equips policymakers and developers to identify opportunities; it also facilitates peer learning and encourages a measure of competition among cities working to attract new residents, investment, and housing production.

Attleboro and Fall River did not respond to the 2025 survey; as a result, this analysis relies mostly on their 2024 responses (publicly available data on MBTA compliance and the creation of transit-oriented development (TOD) zones was used to gather 2025 data for Attleboro on multifamily zoning and parking requirements).

These charts capture how concentrated people and employment are within neighborhoods, a key factor in determining whether an area can generate enough ridership to support high-frequency transit service. To assess this, we combine residents and jobs per acre into an urban intensity index and then calculate what share of census block groups and train-station TOD zones exceed the threshold of 60.

Urban intensity is the foundation for TOD and sustainable growth. When residents and jobs are clustered in dense mixed-use areas, it is possible to efficiently provide frequent transit service all throughout the day. This increased transit service will in turn increase land values, making additional infill development more economically viable. Higher urban intensity also lowers the per-unit cost of infrastructure and services, which can make business improvement districts and other district management strategies more effective.

Urban intensity is calculated as residents plus jobs divided by census block group land area. The threshold of an urban intensity index of 60 draws on prior research, as described in the MassINC Policy Center’s 2018 transit-oriented development study. Population counts come from the 2023 American Community Survey (5-year sample). The number of jobs in each census block group are drawn from the 2022 LEHD Origin–Destination Employment Statistics (LODES) Workplace Area Characteristics (WAC) file. Block groups are statistical units, not neighborhoods, so values can vary sharply depending on weather the area includes industrial land, water, or other land uses.