Study Finds Strong Potential For Downtown Housing Development
A study commissioned for the city of Springfield, Massachusetts finds strong potential for new market-rate housing in the downtown area where a casino is proposed. But housing developers say high costs and available financing are challenges.
The study says the market potential exists to build up to 1,550 units of market-rate housing over the next five years in downtown Springfield and the adjacent South End where MGM is seeking to build an $800 million resort casino. Study author Laurie Volk of Zimmerman/Volk Associates said the development of housing in the center city would be enhanced by the casino, but is not dependent on it.
Among the assets the study concludes that should make downtown Springfield attractive as a place to live are historic buildings, employment opportunities, cultural and tourist attractions, parks and the riverfront, “walkability,” and access to Interstate 91.
The study looked at market potential as opposed to market demand, but Volk said housing developers should consider building lofts and single-bedroom apartments that other research has shown are currently in demand by young adults without children and by older adults looking to downsize from large houses.
Although the study did not indentify potential sites for new apartment buildings Volk said there are numerous empty lots in the South End as well as vacant commercial buildings downtown that could be converted to housing.
The study was a follow-up to one that was done in 2006. That earlier study also identified a strong potential for new housing downtown, but it never materialized because of the housing market crash in 2008, according to Volk who says conditions have dramatically improved.
The majority of apartments in downtown Springfield are rent-subsidized or designated for people with low incomes, with just 10 percent currently priced at market-rates, according to Volk.
Evan Plotkin, who runs a company that owns and manages commercial buildings in downtown Springfield, believes it is critical to have more people living downtown.
Tom Kegelman of Home City Housing Development Corp. of Springfield said the challenges to building market- rate housing downtown are high construction costs and lack of financing.
Massachusetts has a new state tax incentive program for housing development in the older so-called Gateway Cities such as Springfield.