Editorial: This problem impacts everybody
Across the U.S., the overall cost of goods and services has risen at the fastest rate since 1981. Of course, inflation impacts everything differently; it’s not as if the price of everything rose by 8.3% in the past year. The cost of certain goods, like gasoline, have risen at a much higher rate, while the prices of other commodities have stayed relatively steady. Inflation has had uneven impacts across the country and in different sectors of the economy.
In Central Massachusetts, the one rising cost that should concern us the most is housing, which is a sector where prices were already on the rise pre-COVID, and they have only accelerated during the pandemic. In Worcester County, the median price of a single-family home was $380,000 in April, a jump of 10.1% over the course of 12 months, according to The Warren Group. The previous two years, the figure had jumped 9.2% and 6.6%. In Worcester, the average rent for a one-bedroom apartment was $1,525 per month, an increase of 14%, according to data from the website Zumper. As recent as 2016, the average monthly rent for that same unit was under $1,000.
The rapid increases in the cost of owning or renting in our region should worry business owners, as having suitable housing your employees can afford is key to providing stability in their personal and professional lives. Few businesses can afford to hand out 10% raises each year to cover those increases, which means the housing market becomes slightly more out of reach for every employee each time prices go up, and that is not even taking into account the rapid rise in mortgage rates. If your workers are dedicating a greater portion of their earnings to housing and transportation, that leaves less money for everything else, which diminishes their overall security and quality of life.
For years, tech firms in other high-cost regions like the San Francisco Bay – one of the few housing markets more constrained than Greater Boston – have been struggling with housing affordability for employees. While their approach is multi-faceted, one of the main solutions they have focused on is the need to invest in more housing. That translates to more affordable housing for lower-income workers, and more housing options for those people displaced by higher-earning tech employees driving the seemingly unending demand.
Building more housing in Central Massachusetts is one obvious solution to the problem here as well, but the pace of building has fallen well behind demand; and developers, naturally, want to maximize the profit on each project, as their costs have increased exponentially, too. One option is for Central Massachusetts businesses to look to outlying communities still within a somewhat short commute to their offices. Places like Southbridge, Charlton, Spencer, and the Brookfields that despite significant increases, still have relatively reasonable housing costs. Throw in some improvements to the public transit system and a progressive work-from-home policy from your company to cut down on commuting costs, and some of the steep housing cost increases can be mitigated. The city of Worcester, and the county as a whole, have been booming. It’s in everyone’s interest that inflation and the spike in housing costs does not kill the golden goose.
WBJ Web Partners
Most Recent
Most Recent
0 Comments