All Forum Posts by: Brian J Allen

The Federal Reserve Bank of Boston recently released a revealing report titled Why New England’s Labor Force Participation Has Been Recovering So Slowly Since the COVID-19 Pandemic. The findings are striking: between 2019 and 2023, New England’s labor force participation rate declined by 2.3%—a drop 1.8 percentage points worse than the national average. This troubling trend raises questions about the region’s long-term economic vitality, particularly its housing market.

Where Have the Workers Gone?

The Boston Fed attributes more than half of this labor force decline to excess retirements and an aging population—a challenge many U.S. regions face. However, it's critical in New England due to its older demographic profile.

Beyond demographics, several structural factors are contributing to the issue:

Out-Migration: High taxes, including the recently implemented millionaires’ tax and steep property taxes, have incentivized residents to relocate to lower-cost states.

Declining Prime-Age Participation: Workforce engagement among individuals aged 25–54 remains weak. Possible drivers include COVID, disability, evolving lifestyle preferences, and the expanded acceptance of remote work, which has allowed some workers to move out of the region entirely.

Sluggish Immigration Growth: While not covered by post-2023 data, earlier trends suggest that immigration into the region has not kept pace with workforce attrition.

What Does This Mean for Housing?

The housing market, which depends on population and job trends, will likely be affected in several important ways by a shrinking workforce:

1. Slower Demand Growth

When fewer people are working or looking for jobs, demand for housing may go down. With fewer working-age adults—especially those with steady incomes—there will be fewer buyers and renters. If more people also continue moving away, some housing markets could see home prices and rents stop growing or even start to drop.

2. Changing Housing Preferences

As New England’s population ages, demand will shift toward:

- Smaller, downsized homes

- Senior-friendly and accessible housing

- Assisted living and continuing care facilities

At the same time, demand for large single-family homes may decrease, especially in suburban and rural areas with aging populations and fewer young families.

3. Fiscal Strains on Local Governments

A smaller workforce can lead to lower income and property tax revenue, which puts financial strain on local governments. This might lead to tough decisions, like raising taxes for the people who stay or cutting important services like schools, roads, and public safety. These changes could make some areas less attractive to live in and hurt the local housing market.

4. Construction Labor Shortages

Ongoing worker shortages—especially in construction—will make it harder to build new homes. This could limit the supply of housing at a time when affordability is already a big problem, especially in cities where housing costs are high.

5. Urban-Suburban Divergence

Cities like Boston, with strong anchors in biotech, finance, and higher education, may still attract younger, mobile professionals, keeping their housing markets relatively stable. In contrast, smaller towns and rural areas facing both out-migration and an aging population may see falling home values, rising vacancies, and weakened economic prospects.

Looking Ahead

The Boston Fed report stops at 2023, but the patterns it identifies offer a preview of the challenges to come. If these trends continue, New England’s housing market may experience:

- Slower overall growth

- A shift toward age-oriented housing

- Uneven development across urban and rural areas

However, the future isn’t set. Smart policy decisions—such as attracting younger workers through job creation incentives, reforming state tax structures, and increasing immigration—could help counterbalance these demographic and economic headwinds.

Final Thought

The evolving labor landscape is reshaping not just the workforce, but the homes we live in and the communities we build. For stakeholders in housing, planning, and policy, now is the time to rethink how New England adapts to a grayer, leaner workforce—and to reimagine what housing looks like in a future that’s already beginning to unfold.

@Maverick Shah as @Nicholas L mentioned CAP rate does not give you the true price of a condo, the comps do, but for your purposes it is a good measure of your return on cash. I do a bunch of investment condos in Worcester for clients and they make sense from a management perspective and a way to dip your toe in the market. I have buyers who were comfortable parking money, getting the return and not dealing with anything. The true measure is often the cash on cash return based on leverage. Good thing condos are inexpensive and allow you to simply park cash. The most important part of worcester is knowing where you are buying. It is a big and diverse city and certain areas have better rents for various reasons. Make sure you know the complex you are buying and the area as well. Additionally in Worcester they sell attached SF homes which rent very well. NO CONDO FEES and typically you can push the plowing and mowing onto the tenants which is good as well. Let me know if you need any help.

@Colleen F.. The issue here is property taxes which are much lower in Framingham, and personal property taxes on the equipment.  Worcester with its Dual Tax rate is chasing all the businesses away inadvertently.  Yes labor is cheaper, transportation is likely cheaper as well, and realistically the rents are cheaper, but the city council votes on tax rates and they continually are switching that tax rate from the voters(residential households) to businesses.  It is a shame as the city has great opportunity for growth, but most of the residents of Worcester are forced to go East for jobs as businesses either are not established in Worcester, or move to the suburbs to control their fixed costs.

This summer, Jack’s Abby Brewing of Framingham acquired Wormtown Brewing of Worcester, marking another step in the ongoing consolidation of the microbrewing industry in Massachusetts. Wormtown has built a strong brand, with its beer recognized beyond the local region.

However, this merger raises questions about the challenges of doing business in Worcester. If Wormtown is better off brewing its beer in Framingham, a key factor could be Worcester’s commercial tax rate. The dual tax rate in Worcester has been a deterrent for businesses, and this merger serves as yet another example of its impact.

From a financial perspective, the numbers are clear. Worcester’s commercial tax rate stands at $30.04 per $1,000 in property value, compared to Framingham’s significantly lower rate of $11.94. On top of that, Wormtown was being charged approximately $115,000 in personal property taxes for its equipment, in addition to rent and likely a portion of a triple-net lease.

By moving manufacturing operations to Framingham, Jack’s Abby can increase capacity without incurring additional taxes or equipment costs. Given the tax disparity, choosing Framingham over Worcester makes clear economic sense.

Interestingly, Worcester has a lower cost of residential rents and likely lower labor costs than Framingham, yet its business tax policies continue to push manufacturers out. This trend is reinforcing Worcester’s evolution into a bedroom community for towns with more favorable business climates to the east.

On the bright side, Jack’s Abby has announced plans to expand Wormtown’s taproom on Shrewsbury Street, including outdoor seating. While this is great news for local beer enthusiasts, it underscores the irony that Worcester residents will be enjoying beer brewed in Framingham—largely due to Worcester’s tax structure.

@Tre DeBraga. I do all of Worcester County if you are interested.  Basically I advise people to stay close to where they want to be and wait it out.  If you have to get to Marlboro then Worcester/millbury is good, but if you have to get to Boston during business hours, you might want to be north or south with better Train Access.  DM me if you are you want to chat.

@Elisha Johnston Welcome to BP and Worcester.  I would be glad to help, am local and deal exclusively with Multis and Househacks.  Ironically my son is applying to med school this summer.  

Food insecurity in Worcester has doubled from 17.7% to 38% since 2020. This sharp increase raises concerns about broader economic stability, particularly in relation to housing and rental affordability.

What is Food Insecurity?

Food insecurity means that individuals and families cannot consistently access the food they need, often forcing them to make difficult choices about how to allocate their limited financial resources. It is reminiscent of early human societies that struggled to grow and prosper because they had to spend most of their time securing food.

Impact on Housing and Rents

With Worcester rents rising rapidly over the past five years, households facing food insecurity are often forced to cut costs elsewhere. When people struggle to afford food, they may also struggle to pay rent, leading to increased financial stress and difficult trade-offs between essentials like housing, transportation, and healthcare.

Tenants who are food insecure are likely also rent-burdened, meaning they spend a significant portion of their income on housing. This situation is problematic for both tenants and landlords. If tenants fall behind on rent, they risk eviction, while landlords face financial instability from unpaid rent. Massachusetts’s tenant-friendly laws make eviction a lengthy and difficult process, leaving landlords in a precarious position.

While there are financial assistance programs available to help tenants behind on rent, relying on such aid is not a sustainable solution. Ideally, a balance should exist where tenants can afford their rent without requiring external support, fostering a stable and cooperative rental market.

The rapid rise in food insecurity signals deeper financial distress among residents, which directly impacts rental stability. Without addressing these economic challenges—whether through increased wages, rental assistance, or expanded food aid—both tenants and landlords will continue to struggle. A holistic approach to housing and economic stability is needed to ensure a thriving Worcester for all residents.

There has been significant discussion regarding former President Trump’s statements about deporting illegal immigrants, particularly those with criminal records. While the feasibility of such mass deportations remains uncertain, it is worth considering how such actions, if implemented, could impact Worcester’s rental real estate market.

The Current Housing Landscape in Worcester

Governor Maura Healey has recently reduced state spending on housing assistance for migrants, though it is unclear whether these cuts affect documented or undocumented individuals. The state is working to transition migrants from motels to apartments, which has freed up some temporary accommodations but increased demand for rental housing. Local social service agencies have already reported heightened demand, reaching out to landlords in search of available apartments.

The Three-Tiered Deportation Impact

If a large-scale deportation initiative were to occur, its impact on the Worcester rental market would depend on three primary factors:

1. Deportation of Criminal Illegal Immigrants: While deporting undocumented individuals with criminal records might be a priority, the actual number of such individuals is likely small. This means the overall impact on rental demand would be negligible.

2. Voluntary Departures: Some undocumented immigrants may choose to leave voluntarily to avoid forced deportation and potential future entry bans. While this could lead to some vacancies, it is unlikely to cause a significant drop in overall housing demand, as these units would likely be filled by other renters.

3. Mass Deportations: If aggressive enforcement led to a large-scale removal of undocumented immigrants, there could be a more noticeable impact. However, Worcester’s housing market is already under pressure due to high demand, and other populations—including legal immigrants, students, and lower-income residents—could quickly absorb the vacant units.

Other Factors to Consider

- Labor Market Effects: Many undocumented immigrants work in essential industries like construction, food service, and cleaning. Their removal could lead to labor shortages, potentially increasing costs for landlords and indirectly pushing rents higher rather than lower.

- Local Enforcement Challenges: Worcester’s schools, churches, and even police departments do not have strong incentives to actively assist in mass deportations. Without local cooperation, large-scale removals may be difficult to implement effectively.

- Substitution of Tenants: Given the ongoing demand for housing in Worcester, vacant apartments are unlikely to sit empty for long. Instead, other renters—including displaced residents from Boston’s higher-priced market—could take their place.

Conclusion

While a hypothetical mass deportation effort might free up some rental units in Worcester, the effects on rent prices would likely be gradual and relatively minor. Worcester’s rental market is shaped by broader factors such as migration trends, economic conditions, and state housing policies. Unless there is a dramatic shift in these areas, landlords and investors should not expect a major decline in rental demand or prices due to immigration enforcement alone.

i am looking for help to find properties in the area and get an idea of pricing.  All markets are local and I'm smart enough to know what I don't know

My son is graduating from Seton Hall, and we are looking for a Multi or maybe a large SF house to purchase for him to live in.  Hoping to either find some investors or an investor focused realtor.  I am a realtor myself in MA.  Let me know if there are some folks out there in this area.