Greater New Bedford will have to build 8,700 new homes by the end of the decade to balance the area’s tight housing market, according to a sweeping new report.
The report, titled “Housing for All: Forward-Looking Strategies for a Growing New Bedford,” is an unprecedentedly detailed examination of the city’s housing crisis. It calls for a drastic increase in housing production to stop the region’s rapidly spiraling housing costs. The report was developed by the Regeneration Project Committee, a group of local business and nonprofit leaders within the New Bedford Economic Development Council.
“Economic development and housing are absolutely interrelated,” said Tony Sapienza, co-chair of the council. “You can’t have one without the other.”
A lack of affordable housing is bad for the city’s economy, the report said. High housing costs leave less money in people’s pockets to spend at local shops or start their own business. They also make the city less attractive to larger companies thinking about locating here.
That’s why private sector leaders on the council partnered with researchers at MassInc over the past year and a half to get data-driven answers on the crisis’s root causes.
The main cause: There’s too much demand for housing here, and not enough supply.
The city’s population has increased more than twice as fast as its housing stock over the last decade, the report said. About 5,000 new households have formed in the region, but there are only 2,800 new housing units.
A boom in the city’s immigrant population is the biggest driver of the city’s population growth, the report said. The number of foreign-born residents has increased by 50% since 2010.
“All these forces are combining to create pressure on the housing market,” said Ben Forman, the lead MassInc researcher on the study.
Related ⇢
If there are so many people clamoring for housing here, why aren’t developers swarming to profit off that demand? “New homes are simply too expensive to build,” the report says. Rents in the region are relatively low, and construction costs are high, so developers would end up losing money on new buildings.
New construction permits in the region fell after the Great Recession of 2008 and never bounced back, the report shows. The economic downturn explains some of the stagnation, but there’s also a dwindling supply of unused land to build on and old buildings to renovate.
When more people are competing for a stagnant supply of apartments, landlords can charge higher rents. And the report shows that’s exactly what has happened in New Bedford — rents increased 27% between January 2022 and July 2023, much faster than in similar gateway cities.
That puts tens of thousands of city residents in a precarious position: The report found that 68% of New Bedford renters would find the typical asking rent to be unaffordable if they were forced to move.
Buying a home is out of the question for all but the most affluent city residents, the report said. Rising property values and interest rates have made the mortgage for a typical New Bedford home unaffordable to 86% of the city’s households.
“That’s a pretty stark number,” Sapienza said.
The report challenged two popular explanations for spiraling rents: That Bostonians are moving to New Bedford in droves, and out-of-town investors are taking over the market.
Renters often utter those fears in the same breath as “The Train” — the MBTA commuter rail route expected to connect New Bedford to Boston this summer. But it’s a myth that South Coast Rail is driving the city’s housing crisis, Sapienza said.
“The myths are really destructive to the agenda,” he said. “I think that was a real driver in our initial decision to get this study funded so that we really understood what’s going on.”
Bostonians moving to New Bedford are likely not fueling the city’s housing crisis, the report said. About a quarter of recent movers in New Bedford came from outside Bristol County in 2021, mostly coming from Brockton, Cape Cod, and Boston. But the newcomers tended to have lower incomes than long-term New Bedford residents, the report found. And they have been moving to the city at a steady rate of about 1,800 people per year throughout the 2010s, which doesn’t match up with the more recent spike in housing costs.
The report also downplayed the role of out-of-town investors as a major driver of housing costs.
“From what we can tell, it doesn’t seem to be a big factor,” Forman said. “To us, it didn’t seem like it was the smoking gun.”
The share of properties with an out-of-town owner actually decreased over the last decade, the report found. Still, the report did not entirely dismiss concerns about real estate speculation. It acknowledged that the data is limited and called for more study.
Catching up to demand
New Bedford has an “impressive pipeline” of housing in the works, the report said. Three hundred apartments are now under construction or have just come on the market, and another 252 apartments have been proposed for future developments. There are also 40 new single-family homes on the way. But those units only account for a small fraction of what the city needs.
Right now, Greater New Bedford needs 4,100 more housing units to have a healthy housing market, the report estimates. More than half of those units are needed for the region’s homeless population and people doubled up in overcrowded apartments, or “couch surfing,” because they can’t afford their own place.
The 9,500 poorest households in Greater New Bedford, who make less than 30% of the area’s median income, are competing for just 6,500 units in their price range.
But even if those 4,100 units appeared tomorrow, population growth would continue to outpace housing production. That’s why the report calls for building 8,700 new units by 2030.
That will require a drastic increase in the pace of housing production. At the region’s current rate, it will take half a century to build 8,700 new units.
Sapienza, the council co-chair, says he’s cautiously optimistic.
“Can we get to 8,700 units? Boy, I sure hope so,” he said. “It’s a big ask.”
The region needs new housing at all price points, the report says. It points to major gaps in the city’s housing supply at both the top and bottom of the price spectrum.
The 9,500 poorest households in Greater New Bedford, who make less than 30% of the area’s median income, are competing for just 6,500 units in their price range. To help this population, the report calls for more affordable housing with support services for those with physical, mental, and substance use disorders.
Meanwhile, there are 6,000 affluent households who can afford to pay much more in rent than they’re paying now. Building more high-end apartments that cater to this market would free up less expensive apartments for renters who need them more, the report argues. That increases affordability for everyone, and the economic evidence backs this up, Forman said.
“There’s no question that it filters down,” he said. “We know that for a fact.”
How to fix the problem
The report praised Mayor Jon Mitchell for the housing plan he released last spring, which included a broad set of actions the city would take to promote more construction and address housing instability.
“This city document was a critical first step, but we recognize that municipal government cannot tackle these problems on its own,” the report said.
In the immediate future, the report recommends that the city put together a detailed implementation strategy for the housing plan it announced last year.
The Regeneration Project Committee also plans to hold a regional housing summit this spring, which “could serve as a watershed event.” The committee hopes the event will spur more collaboration between New Bedford and its suburbs.
Looking further into the future, the report details several other specific strategies for the city to take.
The report calls for the city to take a more active role in assembling land for housing development. That could involve working with property owners, bolstering the New Bedford Housing Authority’s capacity to build mixed-income developments, and even acquiring properties when they become available.
Assembling land for housing developers is a “tried and true” practice to speed the development process along, Forman said.
Subscribe to our Weekender newsletter ⇢
Busy week? Catch up on the most important stories you might have missed with our Weekender newsletter.
“The more you can take that out of the developer’s responsibility and get the project that farther along, the less gap there’s going to be in making that project feasible,” he said.
It’s important to be strategic about developing the city’s land to its full potential because there’s so little developable and re-developable land left, Forman added.
The city should promote homeownership with programs that use deed restrictions to keep home prices within reach, the report says. It’s a controversial approach because it limits the amount of equity homeowners can build, but it ultimately helps families build more wealth in the end, Forman said.
To address the challenges in paying for housing construction, the city should pursue as much state and federal funding as it can, the report says. It also recommends developing a framework for providing tax incentives to developers. The city already provides these incentives, but it would benefit from offering more public clarity on when those incentives can be made available, Forman said.
“I think a lot of people are fearful of negotiating with developers,” he said. “But I think the city’s got enough sophistication to know when a deal makes sense.”
Even if the tax incentives mean the city gets less revenue in the short run, it’s better for the city’s financial health in the long run because they can help developers to build larger projects from the start, Forman said. That generates more tax revenue later on as the incentives phase out.
Finally, the report recommends steps to build the city’s capacity for housing construction. That means training workers in the building trades and supporting developers who are just starting out.
Sapienza characterized this moment as not only a challenge, but an opportunity for the city to grow.
“We have to be positive in spite of the headwinds that the economy has placed before us,” Sapienza said. “There is a way to do some great things now that we understand the magnitude of the problem.”
A city spokesperson denied The Light’s request for an interview with Josh Amaral, the city’s housing director.
“The administration appreciates the group’s initiative to offer input about the City’s housing plan,” city spokesperson Jon Darling wrote in a statement. “We will assess the report’s recommendations to determine whether the City’s efforts can be refined so as to facilitate more housing construction.”
Email Grace Ferguson at gferguson@newbedfordlight.org
Editor’s note: Tony Sapienza is a member of The New Bedford Light’s Board of Directors. The New Bedford Light’s newsroom is scrupulously independent. Only the editors decide what to cover and what to publish. Founders, funders and board members have no influence over editorial content.
Population growth up by 50% in last 10-14 years –
Please stop flapping about the train.
Excellent excellent article
“A boom in the city’s immigrant population is the biggest driver of the city’s population growth, the report said.”
Oh, so yet another problem caused in part by unregulated migration? What a disaster the current immigration policies are.
The population of NB has been relatively stable over the decades, since the early 1900’s. Lost a lot of residents with the de-industrialization period in the late 1980’s and early 90’s. Population and housing stock is not the full picture at all. Price and affordability is just as huge a factor. https://www.biggestuscities.com/city/new-bedford-massachusetts
Trickledown economics is the clear solution to this problem
Stop the illegal immigration from the southern border NOW
Stop the illegal immigration from the southern border NOW also Mitchell is all about the affluent population and is out of touch with reality.
Everyone who lives in New Bedford already knows there are far more vehicles than ever before, between the traffic coming into New Bedford via Route 140 south, Route 6 east & west, and Route 18 north & south between 3:00PM – 6:00PM Monday thru Friday, and the already limited parking on every street that’s lined with triple decker houses, I’d like to know how the increased parking demand and traffic will be addressed with another 8,700, or even another 2,500 housing units.
I can’t even imagine how difficult that will be with little to no options to address that.
I can’t imagine why anyone would want to buy a new home in New Bedford. People are complaining about the need for affordable housing? That’s ridiculous, anyone who is familiar with New Bedford knows that you can’t drive more than ten blocks in any part of the city without running into housing projects, and the people who live there are part of the growing welfare class in New Bedford and across America. I’d like to know how many housing units/apartments that are housing projects along with section 8 housing, I’d bet it’s close to 40%.
If the city and developers build what they call “affordable housing”, I call it low income housing, then what you get is a larger number of people with low income, and there’s no benefit to the city or any of the residents and home owners, and the more low income housing you create, you’ll have a much lower number of middle class residents and home owners.
With the rising costs in heating oil, natural gas, electricity, and property tax rates as well as commercial tax rates and personal property taxes that business owners have to pay each year, then add in the higher costs for auto insurance, and commercial/residential property costs in New Bedford will never attract business owners, and new home buyers, there is just too many negative aspects compared to anything positive.
A business that should be all over this is the catholic church, through the diocese of Fall River! Serving the needy is one of their primary fundamentals. How many parishes have they closed throughout the city? Excellent locations with schools and auditoriums ready to convert into apartments or housing. Of course it gets a little tricky with the current tax free status but when money is involved, miracles happen!