2,000+ Worcester Housing Units Delayed By Economic Factors: City

WORCESTER, MA — A variety of economic factors have delayed nearly a dozen high-profile development projects in Worcester with a combined 2,000 units of housing, according to a new report from the city's Executive Office of Economic Development.

In a memo to councilors, Chief Development Officer Peter Dunn said that access to capital, high interest rates, and high construction costs have contributed to delaying major projects — including two inside a special taxing district meant to pay back debt Worcester took on to build Polar Park.

"In the last few years, the effect of these market conditions has been trending negatively, which has resulted in some notable project delays," he wrote. "It also reinforces that these market conditions described are not a localized issue. In fact, we feel strongly that what we are doing at the local level with state and federal support is helping to keep housing production moving in a meaningful way despite some of these headwinds."

Dunn's report also served as a one-year update on the inclusionary zoning law passed by councilors in May 2023. Much of the debate around that law centered on whether it would restrict development in Worcester.

According to Dunn, four new projects will fall under the law, which requires developers to set aside a share of units as affordable for low-income residents. None of the projects have broken ground yet. The law only applies to projects with 12 or more units.

• 12 Front St., 42-unit conversion
• 90 Grove St., 46-unit conversion
• 487 Park Ave., 40 units
• 49 Upland St., 118 units

Here's the tally of delayed projects Dunn compiled for councilors, including the address, developer and number of units:

• 340 Main St, SilverBrick, 312 units (inside existing building)
• Green Island Boulevard, Madison Properties, 125 units
• 3 Eaton Place, Foresight Capital, 145 units
• 5 Salem Square, Foresight Capital, 163 units
• 44 Grafton St., AKROS Development, 105 units
• 274 Franklin St., GoVenture Capital, 364 units (36 affordable)
• 225 Shrewsbury St., Lundgren Equity Partners, 218 units
• 139 Green St., Quarterra, 375 units
• 35 Portland St., MG2, 108 units

Developers behind many of the delayed projects have in recent months asked the city to extend zoning approvals, indicating hope that the projects will move forward eventually.

Out of the delayed projects, the Green Island Boulevard and 139 Green St. developments are inside the Polar Park District Improving Financing (DIF) zone, which collects property taxes to pay off debt. The DIF encompasses an area roughly between Green Street, Polar Park and Lamartine Street. The DIF also collects meal taxes, Worcester Red Sox rent payments for use of Polar Park and parking fees.

Two key projects inside the DIF have opened or will soon: The Cove along Green Street is nearing completion, and is already advertising luxury units for rent for as much as $4,175 per month. The Revington, located across Madison Street from Polar Park, is renting units for between $1,900 and $3,700 per month. Outside the Canal District, the nearly complete Alta on the Row off Shrewsbury Street is renting luxury units for between $2,000 and $3,500 per month. Boston-based developer Madison Properties is also wrapping up an all-affordable building near the corner of Madison and Washington streets with 80 units.