top of page

Multiple factors contribute to Gloucester's rising housing costs.

Updated: Aug 16, 2023

"Greedy developers are the reason Gloucester is no longer affordable."

The Facts:

Developers are indeed capitalizing on a single-family-home market with skyrocketing sale prices, and housing is in fact unaffordable here, as it is just about everywhere.

Look, we get it. It’s easy to blame developers for the high cost of housing here. They’re often from out of town. They tend to drive flashy cars. They seem to care little about our unique history. There’s some truth to all of this but the reality is it is complex market forces - not developers - that explain why Gloucester is no longer an affordable place to live - and the sooner we acknowledge this the better.

The fact is, there are several factors contributing to the rise in housing costs in Gloucester:

  • Supply and Demand: Gloucester's 2017 Housing Production Plan, reported that housing costs within a municipality reflect numerous factors, including supply and demand. If the latter exceeds the former, then prices and rents tend to rise.

  • Cost-Burdened Households: A significant portion of Gloucester households are cost-burdened, meaning they spend more than 30% of their income on housing. According to 2017-2021 American Community Survey, 5-year census:

    • 48% of Gloucester's renter households are housing cost burdened, spending more than 30% of income on housing costs. 26.2% severely cost burdened spending more than 50% of income on housing costs.

    • 36% of Homeowner Households are housing cost burdened, with 13% severely cost burdened.

  • High Cost of Living: Massachusetts has one of the highest costs of living in the country, ranking third highest most expensive state in the nation to own a home. Additionally, the cost of living in Gloucester, is relatively high compared to other cities in the state.

  • Seller's Market: Gloucester, as is most everywhere, is currently classified as a seller's market, where prices tend to be higher and homes sell faster. This could contribute to rising housing costs.

  • Lack of Affordable Housing: According to the state’s Executive Office of Housing and Livable Communities, Chapter 40B Subsidized Housing Inventory report, of Gloucester’s 13,896 units of housing, only 7.51% is actual deed restricted and/or subsidized housing.

If developers don’t make a profit, they have no incentive to build housing. Local non profit developers like Harborlight Homes and North Shore Community Development Coalition are mission driven, rather than profit driven, so they can take a lower return on investment in order to produce Affordable Housing, but they alone cannot develop the amount of housing needed to meet the demand in Gloucester.

So, while real estate developers may have become the “shiny object” that threatens to distract us from focusing on real solutions to our housing challenges, the actual factors contributing to the rise in housing costs in Gloucester, MA are much more complex and multifaceted.

17 views0 comments


bottom of page