Going for Growth

Promoting Residential Reinvestment in Massachusetts Gateway Cities

Published Date : November 10, 2009
Author(s) : Benjamin Forman

Promoting Residential Reinvestment in Massachusetts Gateway Cities, the second brief in a series exploring evidence-based policy innovations to spur reinvestment and renewal in the state’s key regional cities.

This paper examines state housing spending over the last 15 years and finds that programs designed primarily to increase affordability in strong markets have not been able to meet the needs of Gateway Cities, where the challenge is lack of demand, not lack of supply.

The economics of these weak housing markets make it difficult to break the cycle of disinvestment sparked by manufacturing job loss and decades of suburbanization. Data show that in many Gateway City neighborhoods, home values have fallen well below replacement costs, a dynamic that makes it challenging to finance construction to repair and rebuild housing in distressed neighborhoods.

With no housing investments designed to support comprehensive neighborhood revitalization projects, Gateway Cities rely heavily on the state’s affordable housing resources. Since 1993, about a fifth of state affordable housing investment has gone to Gateway Cities. These communities often employ affordable housing funds reluctantly because they are the only capital available to address blight.

While affordable housing redevelopment can resolve concerns on a given block, it may further destabilize Gateway City neighborhoods by drawing families away from the existing housing stock. Reliance on affordable housing funds for neighborhood revitalization may further concentrate low-income families in high poverty areas, thwarting efforts to restore healthy demand for housing.

This policy brief argues that Massachusetts needs new approaches to promote residential reinvestment in Gateway Cities by describing in more detail the unique challenges of weak housing markets and the need to address them; building a framework for a comprehensive weak market housing strategy; outlining the state’s current housing resources, and their utilization in weak markets over the last 15 years; and concluding finally with an action plan for a new comprehensive neighborhood revitalization strategy.

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