The Changing Outlook for Rentals
By Dave Carver

We have three examples of the changing outlook. Two in Williamstown and one example in Lee. The mill project in Lee started with a mixed use plan: commercial, market housing, and some affordable. All that is left may be 100 percent affordable.

Also, the cost of the new government regulated housing is approaching $600,000 per apartment. They are small and basic. This kind of cost must have an inflationary impact on all privately financed housing. $600,000 per affordable unit only works because the government funds a portion so the actual cost does not matter.

Since I have been in Berkshire County, I estimate that way over 1000 units of government-regulated rental housing have been built and only a small fraction of them for market rate rental housing. At the same time, the population has decreased from 150,000 in 1980 to 125,000 today so you would think there would be a surplus of rental housing. And in fact, there is. However, much of what is vacant is low quality and/or needs substantial renovation.

The ten percent state guideline is for every housing unit in a town and since most Berkshires towns are 2/3 single family or duplex and those are not generally regulated in any meaningful amount, the 10 percent must be derived from remaining 1/3 of multifamily so as a practical matter the rule is saying 33% of a town’s multifamily rental housing should be government regulated.

In Pittsfield and North Adams, I would estimate the number of government regulated multifamily housing is growing and is heading towards 50%. I don’t think a lot people realize the actual numbers are that high.

You can see I think we need more market rate rental housing to maintain a healthy balance of housing options for all income groups. Building low income housing has always been easier to build because the government offers financial plans to build it and make it more profitable than market-rate housing, but we need it, and the good news is many elected officials and development officials realize that and are helping. For the record, we still own and manage 75 units of scattered site regulated housing in north county built from 1987 to 1991 and we sold 57 units I built in 1983 in Pittsfield so I’m aware of how the system works.

Editor’s Note: This is the second article about housing by Dave Carver, a developer with 40 years of experience. Carver uses the term “market rate” housing as others use the term “workforce” housing. Market rate (workforce) rental housing is defined for those earning up to 100% of Area Median Income (AMI). Affordable rental housing is for folks earning 50% or less of AMI. AMI is $76,000 annually. The target set by the government for rent is 30% of income. For those who qualify, the government subsidy is the difference between 30% of income and the actual cost of rent for those who qualify.