Through the roof: Rents in Worcester soar from 'unrelenting' market

WORCESTER — By renting a one-bedroom apartment along Grand Street, Luis Herrera would by August of last year have a place in the heart of the city from where he could easily commute to his electrical apprenticeship at a construction site in the Canal District, work a weekend job and manage to pay a monthly rent that he considered reasonable.

At $1,745 a month, which Herrera and his then-girlfriend would split down the middle, renting that apartment at Royal Apartments Worcester was a better option than the one they had months before elsewhere in the city.

But that didn’t last long.

Almost nine months into the one-year lease, Herrera and his girlfriend were handed a rent increase by the managing company Beacon Properties, who gave them the option of either a yearlong renewal of $1,919 a month, or a $2,100 payment on a monthly basis.

Herrera, 22, and his girlfriend sealed the letter after checking off the third option — that of moving out.

Once again, Herrera was returning to the market for another apartment for the second time in less than two years since moving out of his mother’s apartment.

“They just spiked up the rent and didn’t really give us a reason,” said Herrera on Monday. “They just told me that that was just the market price.”

In Worcester, the average price for rent was estimated by Forbes to be $1,995 using Realtor.com data from February , ranking the city as having the third worst rental market in the country behind Virginia Beach and New York.

A clear issue for residents in recent years, one of the contributing factors that Forbes has cited was a vacancy of 1.7% and a rate of 94 rentals available per 100,000 households.

Asked for a comment on the rent increase at Royal Apartments Worcester, Beacon Properties Vice President Michael Wood attributed the increase to an “unrelenting” rental market.

“Especially in a city that was just found by Forbes to be one of the most competitive rental markets in America,” said Wood. “Beacon Communities aims to keep rents competitive while providing excellent property management services for our residents.”

Michael DeLuca, who has doubled as a real estate agent but also as a landlord of several properties in the city and nearby towns for 20 years, agreed with the pattern of the findings.

On a conversation at one of his rentable three-decker apartments on Shamrock Street — his only vacancy out of the 35 units he owns — he added that contributors such as COVID-19 “supercharged the problem."

In DeLuca's view, landlords have no choice.

“Landlords have to raise their rents,” said DeLuca. “Otherwise, they're not going to be able to afford or maintain their buildings. The city has jacked up taxes, sewer and water bills have gone up every year in the city, insurance has gone up a lot on all these buildings.

“If you're a responsible landlord that's trying to invest in their building and maintain their building, if you're not charging market rates or close to it, you’re not being smart.”

To increase availability, the city has accelerated the approval of developers erecting hundreds-unit buildings in the past few years, especially in the Canal District, where older buildings have been razed to make way for projects such as the 228-unit The Revington along Madison Street and seven-story The Cove along Green Street, to mention a couple.

Many of the projects feature modern design rooms, with sizes ranging from studio to three-bedroom, in addition to amenities often advertised as “luxurious” and hangout areas with pools and co-working areas.

DeLuca praised the developments as a solution to the issue of availability, although he lamented that he didn’t see that becoming a solution to the higher rates.

“The good news is that there's been a lot of new apartment buildings,” said DeLuca. “The issue with those types of buildings is they tend to be way more expensive than let's say a classic three-decker, partially because they're new, partially because there's a lot of amenities — let's face it, I don't have a gym and a pool here on Shamrock Street.”

Karynsue Marchione-Reilly, a local real estate agent, echoed DeLuca, connecting rent increases to an upward hike in mortgage rates for homeowners, using the area around Polar Park as an example for how rapid property appreciation forced developers to increase rents.

Marchione-Reilly also attributed the low vacancy rate to the problem, connecting those who can’t become competitive in the current real estate market to a higher demand for rentable properties.

The median price for a single-family home in Worcester was $414,000 in March, which represents an increase of almost $50,000 on a year-over-year basis, according to The Warren Group.

“You need to make $116,000 to afford a single-family home,” said Marchione-Reilly. “If you can’t, then you’re looking to rent if you still want to live in the city.”

But staying in the city might not be an option for Herrera, who even though knows Worcester as his longtime home since 2010, when he left the Dominican Republic, he might just have to leave Worcester for him to afford it.

Herrera is completing the third year of his four-year electrical apprenticeship at a 370-unit development at the former location of Our Lady of Mount Carmel Church called Alta on the Row. The 22-year-old said the irony of contributing to the construction of what has been deemed a solution for a problem he is struggling with doesn’t escape him.

“I wouldn’t be able to afford to live there,” said Herrera.

While holding a second job as a security guard in Maynard, Herrera said that he is now looking for a studio, as he will also part ways with his former girlfriend.

A studio for him would be “settling,” perhaps in Southbridge or even Connecticut.

Even that, Herrera said, might be more difficult than it sounds.

“I just toured another studio in Worcester and they were asking $1,500,” said Herrera. “The little gut punch is that in the wintertime utilities become easily $300 a month, that will then make it $1,800 for a studio.

“It just seems impossible how anyone can sustain themselves to afford this.”

This article originally appeared on Telegram & Gazette: Through the roof: Rents in Worcester soar from 'unrelenting' market