SALEM HOUSING NEEDS FINAL DOCUMENT JULY 2015
Salem Housing
Needs and
Demand
Analysis
Prepared for
Department of Planning &
Community Development
City of Salem
120 Washington Street
Salem, MA 01970
T: 978-619-5685
F: 978-740-0404
www.salem.com
Prepared by
Metropolitan Area Planning
Council
60 Temple Place, 6th Floor
Boston, Massachusetts 02111
Tel (617) 451-2770
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www.mapc.org
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Acknowledgements
This analysis would not be possible without the leadership of the Honorable
Mayor Kimberley Driscoll and Director of Planning and Community Development
Lynn Duncan.
Funding for this project was provided by the City of Salem. Technical assistance
was provided by the Metropolitan Area Planning Council (MAPC), the regional
planning agency serving the 101 cities and towns of Metropolitan Boston,
through Direct Local Technical Assistance (DLTA). The following MAPC staff
provided professional support: Jennifer M. Raitt, Chief Housing Planner; Matt
Gardner, Research Analyst; and Holly St. Clair, Director of Data Services.
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Table of Contents
Methodology ............................................................................................ 5
Introduction ............................................................................................. 6
Comprehensive Housing Needs Assessment .............................................. 8
Demographics ....................................................................................... 8
Housing Stock ..................................................................................... 18
Housing Affordability ........................................................................... 24
Tables & Figures
Figure 1: North Shore Task Force Subregion ............................................................... 8
Figure 2: Salem Population Change (Stronger Region & Status Quo), 1990-2013
........................................................................................................................................... 13
Table 1: Population Change by Age (Stronger Region), 1990-2013 .................... 14
Figure 3: Average Household Sizes (by subregion, MAPC region, and
municipality) .................................................................................................................... 15
Table 2: Average Household Size, City of Salem ...................................................... 15
Figure 4: Total Households, 1990-2030 .................................................................... 16
Figure 5: North Shore Task Force Households by Type ........................................... 18
Table 3: Households by Type ....................................................................................... 18
Table 4: Head of Household by Age ............................................................................ 19
Table 5: Percentage and Total Change in Population by Race ............................... 21
Figure 6: Non-White Population Share in the North Shore ..................................... 21
Table 6: Salem School District Enrollment ................................................................. 23
Figure 7: Median Household Income, North Shore Subregion municipalities ..... 25
Figure 8: Household Income Distribution, City of Salem ........................................ 25
Figure 10: Median Household Income ........................................................................ 27
Table 8: Housing Units by Type, City of Salem ......................................................... 29
Figure 11: Housing Units by Type, North Shore Subregion municipalities .......... 30
Figure 12: Housing Units by Year Built, North Shore municipalities ..................... 30
Figure 14: Housing Tenure by Age of Householder, City of Salem ....................... 32
Figure 15: Median Home Sale Prices, 1994-2014, City of Salem .......................... 34
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Figure 16: Number of Home Sales by Type, 1994-2014 ....................................... 34
Figure 17: Median Gross Rent, North Shore Subregion municipalities ................. 35
Figure 18: Housing Units Permitted, 2000-2013, North Shore Subregion
municipalities .................................................................................................................. 36
Recent & Future Development ...................................................................................... 36
Table 9: Development Pipeline, City of Salem ........................................................... 36
Figure 20: Housing Unit Demand by Age Cohort, Stronger Region, 2010-2020,
City of Salem .................................................................................................................... 39
Figure 21: Housing Unit Demand by Age Cohort, Status Quo, 2010-2020, City
of Salem ............................................................................................................................ 40
Table 10: Net Housing Unit Demand by Age Cohort and Income, 2010-2030,
City of Salem .................................................................................................................... 40
Table 10B: Net Housing Unit Demand by Age Cohort and Household Type, 2010
– 2030 City of Salem, ..................................................................................................... 42
Table 11: Net Housing Unit Demand by Income and Household Size, 2010 –
2030, City of Salem ........................................................................................................ 42
Table 10: Percentage of Families with Incomes below the Poverty Level, City of
Salem ................................................................................................................................. 46
Table 11: Affordable Housing Income Limits, Boston-Cambridge-Quincy, MA-
NH HUD Metro FMR Area ............................................................................................... 48
Table 12: Income as Percent of AMI by Household Type/Size ............................... 48
Table 13: Fair Market Rents .......................................................................................... 50
Table 14: City of Salem Subsidized Housing Inventory ........................................... 51
Table 15: Affordable Housing Unit Need ................................................................... 55
Figure 21: North Shore Task Force Cost-Burdened Households ........................... 57
Table 17: Cost Burden by Household Type, All Households, City of Salem ........ 58
Table 18: Cost Burden by Household Type, Low-Income Households, City of
Salem ................................................................................................................................. 59
Table 19: Cost Burden by Household Type, Low-Income Households, City of
Salem ................................................................................................................................. 60
Table 20: Housing Problems for Salem Households at 80-120% of AMI ............. 61
Figure 23: Foreclosure Deeds Issued on the North Shore, 2013 ........................... 63
Table 23: 2012-2015 Condominium Conversions ................................................... 65
Figure 24: Condominium Conversions, 2006-2011; 2012-2015 ......................... 66
Table 24: City of Salem Subsidized Housing Inventory (6/5/15) .......................... 68
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I. Introduction
Salem was the second incorporated city in Massachusetts (April, 1836), and is
the second oldest settlement in New England. It is located north of Boston
along the Atlantic Ocean and is bordered by Beverly, Danvers, Peabody,
Marblehead, Swampscott, and Lynn. Considered the “hub” of the North Shore,
the city is home to much of the area’s commerce and development, as well as
the educational, medical, legal, cultural and banking functions of the area. The
city’s downtown hosts a robust tourism economy based on the city’s many
historic and cultural resources. Salem is home to a diverse workforce
concentrated within the health care and educational services industries. With
over 19,000 housing units, Salem offers a range of housing opportunities from
large, multifamily communities to historic, single-family homes. Although
significant gains have been made to improve the affordability of housing, Salem
still faces several challenges. Creating homes for the next generation of
workers while also addressing the complex needs of an aging and increasingly
diverse population is one of those challenges.
The high cost of housing and lack of affordable or attractive options for many
households has many negative consequences. Housing costs are a major
contributor to the high cost of living, and serve as a major disincentive to firms
and talented workers in terms of location. Paying an excessive amount of
income on housing means families have less money to spend on other
essentials like food or health care, and spend less money at local businesses.
This report provides an overview of the current demographics of Salem, the
existing housing stock, projected changes in housing demand over the coming
decades, and the types of new housing that are needed to meet that need.
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Subregional Context
The city is within the North Shore Task Force (NSTF) subregion.1 Salem is
categorized as a Regional Urban Center under MAPC’s community type
classification system. These communities are characterized by an urban-scale
downtown core with multiple blocks of multi-story, mixed use buildings;
moderately dense residential neighborhoods surrounding this core; and (in
some cases) lower density single-family residential development beyond. Some
of these communities are ‘built out,’ while others still have vacant developable
land around the periphery of the community. Rental housing and multifamily
structures comprise a significant component of the housing stock.
Figure 1: North Shore Task Force Subregion
1 This is one of MAPC’s eight subregions and also includes Beverly, Danvers, Essex, Gloucester, Hamilton, Ipswich,
Manchester, Marblehead, Middleton, Nahant, Peabody, Rockport, and Topsfield.
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A Note on Data Sources:
Many portions of this analysis make reference to or include MAPC projections
data.2 These projections include two scenarios for regional growth. Each
scenario reflects different assumptions about key trends. The “Status Quo”
scenario is based on the continuation of existing rates of births, deaths,
migration, and housing occupancy. Alternatively, the “Stronger Region” scenario
explores how changing trends could result in higher population growth, greater
housing demand, and a substantially larger workforce.
The Status Quo scenario found that continuation of current levels of in-
migration and housing production would lead to a declining workforce and
economic stagnation in Metro Boston over the coming decades. In contrast, the
2 Metropolitan Area Planning Council. Regional Growth Projections. http://mapc.org/projections/
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increased migration rates of the Stronger Region scenario could fuel regional
job growth of 7% between 2010 and 2040.
Other portions of this analysis rely on data from the U.S. Census Bureau’s
decennial census and the 5-year American Community Survey (ACS). Data from
the decadal census is generally more accurate because it is based on a
complete enumeration of residents and housing units. ACS data are based on a
sample of households and have some uncertainty in their estimates, the
magnitude of which is represented by margins of error, represented alongside
the data wherever possible.
The remaining portion of this analysis depends heavily on the Comprehensive
Housing Affordability Strategy (CHAS), released annually by HUD. This dataset is
based on custom tabulations from the ACS and include details unavailable in
standard ACS tables.
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II. Housing Needs and Demand Analysis
An analysis of local demographic data and housing stock reveals key
characteristics and trends in Salem that help explain housing need and
demand. In order to understand how the city compares to its neighbors, city
data is compared to other municipalities in the North Shore subregion, to the
MAPC region, and to Massachusetts. Ultimately, the Housing Needs and
Demand Analysis can provide the framework for the housing production goals
and strategies to address local housing concerns.
Demographics
This HNDA is grounded in a thorough examination of Salem's demographic
composition. An analysis of the current population, household composition,
race and ethnicity, and educational attainment provides insight into existing
housing need and demand. Projections of the city's future residential
composition can be used to help inform housing planning efforts.
Key Findings
Salem’s population increased a modest 2% between 2000 and 2010.
Salem's affordable and historic homes, combined with its access to
commuter rail and the region's job centers have attracted young, diverse
workers and families in the region. Should Salem continue to retain and
attract young workers per the Stronger Region scenario, the city's
population is projected to increase by 3,700 people from 2010 to 2030,
bringing the total population to 45,000 (a 9% increase.) MAPC’s Status
Quo scenario projects an increase of only 1,554 (4%) more population
over the same period.
Salem's high rate of non-family households (46%) is 15% higher than the
regional average. Salem's median age of 36.8 is much lower than the
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regional average and lower than other urban communities of the same
type.
Salem's population remains majority White Non-Hispanic at 76% in 2010,
but it is growing more diverse. In fact, the percentage share of non-White
population has grown at a rate faster than the regional average,
specifically among Black and Non-White Latino populations, which
increased by 484 (50%) and 1,924 (42%), respectively. There has also
been a corresponding increase in the number of students with limited
English proficiency in the Salem Public Schools.
If Salem continues to retain and attract young workers, the number of
households is projected to increase significantly from 17,842 to 20,500
between 2010 and 2030, a 14 percent increase, according to MAPC’s
Stronger Region projections. Should rates of births, deaths, migration
and housing occupancy remain consistent under the Status Quo scenario,
households are projected to increase by 1,800 (10%) by 2030.
Population
Housing needs and preferences change over time. Survey data shows that
young householders and seniors on fixed incomes are more likely to occupy
smaller, more affordable units that are easier to maintain. Families with
children may want larger units with more bedrooms and access to open space
and recreational activities. This section describes the population of Salem by
age and how it is projected to change.
Salem’s population made modest gains between 1990 and 2000, adding 2,316
(6%) to its 1990 population of 38,091. While this momentum decreased
between 2000 and 2010, adding only 933 (2%) in population, Salem is projected
to grow at a faster rate in the coming decades.
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Population projections for 2020 and 2030 reference two scenarios: a Status
Quo scenario based on continuation of recent trends in migration, housing
occupancy, and location preference; and a Stronger Region scenario that
assumes increased attraction and retention of young workers and slightly
increased preference for urban settings and multi-family housing. Increased
migration rates of the Stronger Region scenario could fuel job growth of 7%
between 2010 and 2030, creating more demand for housing.
MAPC’s Status Quo scenario projects an increase of only 1,554 (4%) more
population over the time period from 2010 - 2030. Under the Stronger Region
scenario, should Salem continue to retain and attract younger households, the
city is projected to add 3,700 (9%) in population between 2010 and 2030.
Figure 2: Salem Population Change (Stronger Region & Status Quo), 1990-2030
Typical of many municipalities in the region, Salem’s population is growing
older, a result of the aging of the Baby Boomers. As this generation ages, the
65 to 74-year-old population in Salem is projected to increase by 91%, an
increase of 2,438 residents. This increase makes up the largest projected
increase among other age groups in Salem. Meanwhile, the number of children
42,094 42,894
38,091
40,407 41,320
43,163
45,036
34,000
36,000
38,000
40,000
42,000
44,000
46,000
1990 2000 2010 2020 2030Population Status Quo Strong Region
Source: U.S. Census; MAPC
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(under 20) in Salem is likely to decline in the coming years, mirroring regional
trends.
Table 1: Population Change by Age (Stronger Region), 1990-2030
Household Composition
Housing demand is a function not only of population, but also the number and
type of households that the population forms. Each household resides in one
dwelling unit, regardless of the number of household members. As years pass,
some households form, move into the community, or grow larger, while others
grow smaller, seek different housing options, or move out. Net housing
demand is the number of units needed to accommodate additional households
and maintain healthy vacancy rates among owner and renter-occupied housing
units.3 This section looks at the current distribution of household types in
Salem, projected household changes, and net housing unit demand through
2030.
Household Size
3 Low vacancy rates can result in upward pressure on housing prices and rental r ates. In consultation with Barry
Bluestone at the Dukakis Center at Northeastern University, we estimate a natural vacancy rate of 1.5% for
ownership units and 7.0% for rental units.
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One factor driving change in housing demand is decreasing average household
size. As a consequence, the number of housing units produced over time may
need be built at a rate faster than the growth in households. For example, as
population grows and smaller households form, more units need to be built to
meet demand.
In Salem, between 2000 and 2010, average household size decreased from
2.24 to 2.22, although Salem’s average household size is smaller than both the
subregional and regional average. Additionally, the average household size for
other regional urban centers like Salem is much higher than Salem itself.
Figure 3: Average Household Sizes (by subregion, MAPC region, and
municipality)
The decrease in average household size occurred largely among owner-
occupied households. Among renter-occupied households, the average size
actually increased slightly over the same decade.
Table 2: Average Household Size, City of Salem
Tenure 2000 2010
Overall Households 2.24 2.22
2.05
2.1
2.15
2.2
2.25
2.3
2.35
2.4
2.45
2.5
SalemRegional Urban CentersNorth Shore MAPC Region
2000
2010
Source: U.S. Census Bureau
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Owner-Occupied Households 2.4 2.33
Renter-Occupied Households 2.09 2.1
Source: U.S. Census Bureau
In 2010, Salem was home to 17,842 households, an increase of 2%, or 350
households, since 2000. Should rates of births, deaths, migration and housing
occupancy remain consistent under the Status Quo scenario, households are
projected to increase by 1,800 (10%) by 2030. The rate of household growth is
projected to be higher than population growth due to continued declines in
average household size, driven largely by the increasing number of senior
householders who are much more likely to have only one or two people per
household.
Growth in the number of households under the Stronger Region scenario is
projected to increase at a much faster rate. Between 2010 and 2020,
households are projected to increase by 1,400 (8%) additional households. This
rate is projected to remain consistent into 2030, adding a total of 2,600 (15%)
households between 2010 and 2030.
Figure 4: Total Households, 1990-2030
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Family & Non-Family Households
Different household types often have different housing needs or preferences.
For example, a single older adult may reside in or prefer to reside in a smaller
dwelling unit than a family with children. A municipality’s composition of
household types can indicate how well suited the existing housing inventory is
to current and future residents. Salem's 17,842 households can be divided
between families and non-families. The former includes any household with
two or more related persons living together, and the latter includes households
with one person or a group of non-related persons living together.
18,800 19,700 15,806 17,492 17,842 19,200 20,500
0
5,000
10,000
15,000
20,000
25,000
1990 2000 2010 2020 2030Households Status Quo Stronger Region
Source: U.S. Census; MAPC Projections
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Figure 5: North Shore Task Force Households by Type
More than half of Salem households are families. However, Salem's rate of non-
family households (46%) is the highest in the North Shore Task Force.
Additionally, this rate is 15% higher than the MAPC regional average of 31%.
Table 3: Households by Type
Source: American Community Survey, 2009-13
54%
46%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%Distribution of Household Type Family
Source: U.S. Census Bureau; MAPC Projections
Table 2: Households by Type
Estimate
% of
Supragroup % of Total
Family Households 9,648 54%54%
Family Households with Children 4,107 43%23%
Married-couple Family Households 6,363 66%36%
Married-couple Family Households with Children 2,332 37%13%
Single Male Family Households 719 7%4%
Single Male Family Households with Children 312 43%2%
Single Female Family Households 2,566 27%14%
Single Female Family Households with Children 1,463 57%8%
Non-Family Households 8,194 46%46%
Single Person Household 6,301 77%35%
Single Person 65 years and over Households 1,870 30%10%
Total 17842 N/A 100%
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Of Salem’s family households, 36% are married families and 13% live with
children under 18 years old. Over 8% of households are single female head-of-
households with children.
Head of Householder by Age
Just as aging Baby Boomers (those born between 1945 and 1970, for our
purposes) will dominate the overall population dynamics of the state, they will
also have a substantial influence on household changes and housing needs in
Salem. As this large generation ages, the number of householders over 60 will
increase by 42% statewide through 2030, and their share of all households will
increase from 29% to 37% over the same period. Meanwhile, the total number of
householders under 60 will change only slightly from one decade to the next,
and most age groups under 60 will see a decline in the number of households
between 2010 and 2030.
In addition to household type, the age of heads of household can indicate
demand for particular unit types and sizes. In Salem, householders age 60-74
are projected to increase by nearly 50% by 2030.
In 2010, the largest group of heads of household was ages 45-59, making up
30.5% of all households. The relative size of this group is projected to decline
by 2030, however. The 30-44 age cohort is projected to increase by nearly 20%
by 2030.
Table 4: Head of Household by Age
Age of Householder 2010 2020 2030
Change
2010-
2030
%
Change
2010-
2030
15-29 2,487 2,632 2,503 16 1%
30-44 4,752 5,075 5,664 912 19%
45-59 5,446 5,169 4,903 -543 -10%
60-74 3,312 4,690 4,946 1,634 49%
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75+ 1,845 1,671 2,471 626 34%
Total
17,84
2
19,23
7
20,48
7 2,645 15%
Source: U.S. Census Bureau; MAPC Projections
Race & Ethnicity
Much of the population growth in Salem during the last decade was fueled by
growth among communities of color. Consequently, the racial and ethnic
composition of Salem has changed significantly over the last decade. Between
2000 and 2010, the absolute number of White (Non-Hispanic) residents in
Salem declined by 6%, and their share of the population declined from 82% to
76%. Meanwhile, the share of the population that is non-White grew at a rate
faster than the regional average. Over the decade, Salem’s Black Non-Hispanic
population grew from 966 to 1,450 (a 50% increase). Salem’s Hispanic/Latino
population grew from 4,541 to 6,465 (a 42% increase).
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Table 5: Percentage and Total Change in Population by Race
Race
2000
Census
2010
Census
% Change,
2000-
2010
Change,
2000-
2010
Black 966 1,450 50% 484
Hispanic 4,541 6,465 42% 1,924
Asian 797 1,083 36% 286
Other 132 166 26% 34
Multi 618 716 16% 98
Native
American 59 66 12% 7
Pacific
Islander 17 17 0% (0)
White 33,277 31,377 -6% (1,900)
Source: U.S. Census Bureau
Salem is one of the most diverse communities in the North Shore Subregion
with the highest percentage share (24%) of non-white residents in the
subregion, eclipsing the second-highest (Middleton) by over 10%.
Figure 6: Non-White Population Share in the North Shore
24%
13% 12%
9% 9% 7% 6% 6% 5% 5% 5% 5% 4% 4% 4% 4%
0%
5%
10%
15%
20%
25%
30%Percent Share Source: American Community Survey,
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The Point neighborhood in Salem is home to a relatively high concentration of
the city's communities of color, with 63% of the neighborhood comprised of
non-white residents. Specifically, the neighborhood largely consists of Latino
immigrants and second and older generations as well as newer arrivals from
Haiti and African countries. 4
4 Creating a Vision, Strengthening a Community: A Vision and Action Plan for the Point
Neighborhood in Salem 2013 – 2020. August, 2013
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Education
Enrollment
Enrollment in the Salem School District remained consistent until the 2012-13
school year when the District saw a 4% decline in enrollment, the largest since
the 2006-07 school year. This could be attributed to a significant decline of the
school-age population, consistent with the projected population in the
municipality.
Simultaneously, the District observed increasing shares of low-income
students. Public schools in Salem have served a higher percentage of low-
income students than any municipality on the North Shore every year since
2007.
Additionally, some of the District's special education programs have grown in
enrollment. The percentage of Limited English Proficiency students nearly
doubled from 2006 to 2013. Conversely, the share of students whose first
language is not English stayed relatively consistent over the decade.
Table 6: Salem School District Enrollment
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Educational Attainment
80% of Salem adults have graduated from high school. The proportion of the
population that did not graduate is slightly greater than the state and county
average. Nearly 40% of Salem residents have earned a bachelor's degree or
other higher educational attainment. However, almost 19% of residents have
some college but did not go on to complete a degree.
Table 7: Educational Attainment (municipality, county, Massachusetts),
Percentage
Municipality
High
School
without
Diploma
High
School
Diploma
College
without
Degree
Bachelor's
Degree or
Higher
Salem 11.5% 24.1% 18.9% 37.1%
Massachusetts 10.6% 25.8% 16.5% 39.4%
Essex County 11.0% 26.5% 17.6% 36.6%
Source: American Community Survey 2009-13
Household Income
Year Total
Enrolled
Change f/
Previous
Year
Minority
English
Language
Learner
Low-Income
Status
Low-English
Proficiency
2013-14 4,336 -1%53.4%53.6%59.7%25.9%
2012-13 4,395 -4%46.9%26.6%55.9%13.0%
2011-12 4,559 0%43.8%24.9%57.7%11.3%
2010-11 4,565 2%43.2%23.8%55.1%11.2%
2009-10 4,496 1%44.0%25.0%53.4%11.3%
2008-09 4,447 1%43.8%25.8%50.2%10.7%
2007-08 4,422 0%42.9%26.2%43.1%10.3%
2006-07 4,433 -4%42.7%25.8%40.8%8.7%
2005-06 4,638 n/ a 40.8%25.6%41.8%7.9%
Source: MA Department of Elementary and Secondary Education
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Household income is an important determinant of how much a household can
afford to pay for their dwelling unit, either to rent or own, and whether that
household is eligible for public housing assistance or subsidies.
Figure 7: Median Household Income, North Shore Subregion municipalities
Salem has the lowest median income of any municipality in the North Shore
Subregion. During the period from 2009 - 2013, the estimated median
household income was $55,780. Median family income was slightly higher at
$64,214 while median non-family income (which includes single person
households) was lower at $40,040.
Figure 8: Household Income Distribution, City of Salem
$55,780
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
Income American Community Survey, 2009-13
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There is a wide range of income diversity in Salem. 27% of households earn less
than $25,000 per year, and 22% earn more than $100,000 per year. Salem's
income spread is significantly different among senior householders (who are
more likely to be retired) than those under the age of 65. Roughly a fourth of
householders age 25-44 reported earning $100,000 or more a year, compared
with only 2% of householders age 75 or more. Over 80% of this age group earns
under $39,999 or less annually.
Figure 9: Household Income by Age of Householder, City of Salem
7.5%
7.9%
11.2%
8.1%
11%
18.9%
13%
13.8%
4.2%
4.2%
0%5%10%15%20%
Less than $10,000
$10,000 to $14,999
$15,000 to $24,999
$25,000 to $34,999
$35,000 to $49,999
$50,000 to $74,999
$75,000 to $99,999
$100,000 to $149,999
$150,000 to $199,999
$200,000 or more
Household Income Source: American Community Survey, 2009-13
12%
22%
40%
14%
14%
43%
17%
13%
3%
14% 10%
5%
17% 14%
6%
25% 27%
2%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
25-44 years 45-64 years 65+ years
over $100,000
$75,000-$99,999
$60,000-$74,999
$40,000-59,999
Between $20,000-
$39,999
Under $20,000
Source: American Community Survey, 2009-13
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The geography of income in Salem shows some consistent patterns.
Households among the lower spectrum of median household incomes tend to
be concentrated in the Point neighborhood of Salem. However, the
neighborhood's proximity to public transit as well as a relatively higher stock of
affordable housing helps to offset the cost of living for these households.
Figure 10: Median Household Income
Housing Stock
The following section examines Salem’s current housing supply and how it has
changed over time. Understanding housing type, age, tenure, vacancy, and
recent development will contribute to an understanding of current need and
demand.
Key Findings
Should Salem continue to attract and retain young workers, demand for
multifamily housing is projected to increase substantially over the coming
decades. To meet this demand, Salem needs to maintain its large stock
Salem Housing Needs and Demand Analysis | July 22, 2015
28
of multifamily housing. Salem's housing stock is primarily composed of
multifamily homes (67%) and has the largest share of multifamily housing
in the subregion.
Most building permits for housing in Salem since 2000 have been for
multifamily units, but more is needed to meet future demand.
In total, by 2030, assuming the Status Quo scenario, Salem will need to
produce a total of 1,900 units of housing to meet demand.
In total, Salem will need to produce 2,725 units of housing by 2030 to
meet demand, according to the Stronger Region scenario (approximately
140 units annually). This projection includes the additional units needed
to achieve and maintain a healthy vacancy rate, which is an important
strategy for avoiding price spikes during periods of increased demand.
Most of Salem's housing stock is renter-occupied (53%), the highest share
in the subregion. Younger householders tend to be renters. The highest
two renter-occupied age cohorts are 15-to-24 year-olds and 25-to-34
year-olds.
Under the Stronger Region scenario, housing unit demand for
householders currently between the ages of 15 and 35 will be 3,200 by
2020, but will be offset by turnover from downsizing Baby Boomers.
Householders currently older than 55 will need 2,100 fewer units in 2020
than they do today, putting 95 single family houses back onto the market
on average each year.
Median home prices have risen sharply since 2012, almost nearing pre-
Recession levels at $327,500.
Type & Age
A third of Salem's 19,626 housing units are single-family homes. Structures
made up of 5+ units comprise 17% of housing stock. The distribution of
Salem's housing units has virtually remained the same since 2000, when 33% of
Salem Housing Needs and Demand Analysis | July 22, 2015
29
housing units were single-family homes. The distribution among multifamily
structures has shifted somewhat, with 20-49 unit structures increasing by 4%
and 50+ unit structures increasing by 1%.
Within the North Shore, all municipalities with the exception of Salem have a
housing stock largely comprised of single-family units. Salem conversely has
the lowest share of single-family housing units within the subregion.
Table 8: Housing Units by Type, City of Salem
Household Type Unit Percent
Single-Family 6,448 33%
Two-Family 3,328 17%
3-4 Units 4,083 21%
5-9 Units 1,610 8%
10-19 Units 881 4%
20-49 Units 1,676 9%
50+ Units 1,600 8%
Total 19,626 100%
Source: U.S. Census Bureau, 2009-2013 American
Community Survey
Salem Housing Needs and Demand Analysis | July 22, 2015
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Figure 11: Housing Units by Type, North Shore Subregion municipalities
56% of Salem's housing stock was built before 1939, a larger share of old
homes than all but one other North Shore municipality. Although an asset to
the community, this is notable because older structures may lack heating and
energy efficiencies and may not be code compliant, which adds to the monthly
utility and maintenance costs. These additional costs have an impact on the
affordability of older, outdated units for both owners and renters. In Salem,
however, a significant share (28%) of housing stock was built between 1960 and
1999. Only 6% of housing was built after 2000.
Figure 12: Housing Units by Year Built, North Shore municipalities
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%TopsfieldWenhamHamiltonMiddletonMarbleheadManchesterRockportEssexNahantIpswichSwampscottDanversGloucesterPeabodyBeverlySalemDistribution of Housing Type Other
50+ Units
20-49 Units
10-19 Units
5-9 Units
3-4 Units
Two-Family
Single-Family
Source: American Community Survey, 2009-13
Salem Housing Needs and Demand Analysis | July 22, 2015
31
Tenure
By a small majority, Salem's housing stock is largely renter-occupied. Of the
city's total 18,363 occupied housing units, 9,727, or 53%, are renter-occupied.
Within the North Shore, Salem has the largest share of renter-occupied
housing.
Figure 13: Occupied Units by Tenure, North Shore Subregion municipalities
56%
10%
28%
6%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%Distribution of Housing Units by Year Built 2000 or after
1960-1999
1940-1959
Before 1939
Source: American Community Survey, 2009-13
47%
53%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%Distribution of Households Owner-Occupied Renter-Occupied
Source: American Community Survey,
2009-13
Salem Housing Needs and Demand Analysis | July 22, 2015
32
Renting in Salem is more common among younger householders. The
distribution of owner-occupancy is slightly more concentrated among older
householders. Because Salem has a greater share of renter-occupied
households than other municipalities in the subregion, each age group has a
much larger share of renters.
Figure 14: Housing Tenure by Age of Householder, City of Salem
Vacancy
According to the 2009-2013 American Community Survey, Salem’s vacancy rate
is at 6.7%. This is above the standard 5% rate, which indicates that the housing
market is not too tight. The city’s rate is considerably lower than the
Massachusetts rate of 9%, but higher than the MAPC region’s rate of 6%.
Housing Market
Housing costs within a community reflect numerous factors, including demand
and supply. If the former exceeds the latter, then prices and rents tend to rise.
Depending on the income levels of the population, these factors can
62
737
1,470 1,937
1,203 834 1,220 793 380 812
2,297
1,617
2,275
942
564
569
322
329
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
15 to 24 years25 to 34 years35 to 44 years45 to 54 years55 to 59 years60 to 64 years65 to 74 years75 to 84 years85 years and overHousehouds Renter
Owner
Source: American Community Survey, 2009-13
Salem Housing Needs and Demand Analysis | July 22, 2015
33
significantly reduce affordability for both existing residents and those seeking
to move in.
Sales Price & Volume
According to data from The Warren Group, the median sale price of housing in
Salem was $298,500 in 2014. For single-family homes, the price was slightly
higher at $319,500; and for condominiums, the price was significantly lower at
$238,000. This is just down from the height of the market in 2006 when the
median sales price was $330,000. Nevertheless, prices have risen sharply since
2013.
Salem Housing Needs and Demand Analysis | July 22, 2015
34
Figure 15: Median Home Sale Prices, 1994-2014, City of Salem
During this same time period, the volume of sales has fluctuated. The number
of transactions for both single-family homes and condominiums has increased
since a low point in 2011 , although single-family sales dipped slightly in 2014.
Figure 16: Number of Home Sales by Type, 1994-2014
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
19941996199820002002200420062008201020122014Median Home Prices in Dollars Year
1-Fam
Condo
Source: Warren Group
0
100
200
300
400
500
600
700
19871989199119931995199719992001200320052007200920112013Number of Sales Year
1-Fam
Condo
Source: Warren Group
Salem Housing Needs and Demand Analysis | July 22, 2015
35
Rent
There is a wide range of median gross rent in the North Shore Subregion. At
$1,063, Salem’s median rent is at the lower end of the range.
Figure 17: Median Gross Rent, North Shore Subregion municipalities
Unfortunately, Census data on rental rates is not the most reliable. First, rents
are self-reported via the American Community Survey. Second, they represent
units that were leased at any time prior to survey response, so they are not an
accurate indication of the current market. Unfortunately, for cities the size of
Salem, there is not an alternative uniform data set of rental rates available.
Housing Units Permitted
Between 2000 and 2013, Salem issued permits for 1,103 housing units. Of
those units, 296 (27%) were single-family units and 807 were multifamily units.
Within the North Shore Subregion only two municipalities issued more permits
(Peabody and Danvers). These municipalities, including Salem, issued more
multifamily permits while all other municipalities issued permits for more
single-family units.
$1,063
$-
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
Dollars Median Gross Rent
Source:American Community Survey 2009-13
Salem Housing Needs and Demand Analysis | July 22, 2015
36
Figure 18: Housing Units Permitted, 2000-2013, North Shore Subregion
municipalities
Recent & Future Development
Development Pipeline
In order to better track Metro Boston’s growth and forecast its future, MAPC
maintains a Development Database with information about thousands of
residential, commercial, and mixed-use development projects recently
completed, in construction, or planned. Much of the data was submitted by
municipal planning staff, augmented by MAPC research. These data can be used
to inform local planning efforts, to identify regionally significant priority areas
for development, and to track progress toward housing production goals.
Table 9: Development Pipeline, City of Salem
Development Stage
Completion
Year Units
Grove Street Apartments Planning 2016 129
0
500
1000
1500
2000
2500
Number of Permits Issued Singlefamily Units
Multifamily UnitsSource: U.S. Census Bureau Building Permit Survey
Salem Housing Needs and Demand Analysis | July 22, 2015
37
Riverview Place Planning 2016 130
50 St. Peter Street Planning 2016 13
Washington/Dodge Street Planning 2018 84
Source: MAPC Development Database
According to the MAPC Development Database, there are currently 356 units in
the planning stage of development.
Projected Development Demand
Aging Baby Boomers (those born between 1945 and 1970) will have a
substantial influence on housing demand in Salem. As this large generation
ages, it will increase the number of householders over 60 by 42% statewide
through 2030, and their share of all households will increase from 29% to 37%
over the same period. Meanwhile, the total number of householders under 60
will change only slightly from one decade to the next, and most age groups
under 60 will see a decline in the number of households between 2010 and
2030.
Changes in housing unit demand result from household formation, dissolution,
and mortality. Young adults currently between the ages of 15 and 30 are poised
to form households after they leave home, dorm, or roommates. Thousands are
projected to do so each year, and each will need a housing unit, typically multi-
family rental units. Meanwhile, older adults have typically already formed
households. Combined with mortality, outmigration, or transition to nursing
homes and other group quarters situations, this translates to a decline in
housing unit demand among Salem residents who were over the age of 55 in
2010, despite a sharp increase in the number of senior-headed households.
The decline in demand from older householders will partly offset increased
demand from their younger counterparts. In Metro Boston, for example, the
decline in demand for single-family homes among householders over 55 and
Salem Housing Needs and Demand Analysis | July 22, 2015
38
over will accommodate 79% of demand for such units from younger households
between 2010 and 2020, and an even greater share in the decade thereafter.
However, shifts in preferences among younger households towards multi-
family units means that only 48% of new multi-family demand will be met
through existing units freed up by householder over 55.
As a consequence of projected changes in household age and growth in the
number of householders, housing demand of particular unit types in Salem is
projected to increase significantly. Under the Status Quo scenario, through
2020, new households headed by someone born after 1984 will need roughly
an additional 3,000 units of housing. Households headed by someone born
between 1966 to 1984 will demand 200 more units of housing. Households
headed by someone born between 1945 to 1964 will need 100 fewer units of
housing. Households headed by someone born before 1945 will need roughly
1,800 fewer units of housing.
Alternatively, according to the Stronger Region scenario, which MAPC
recommends for housing planning, through 2020, new households headed by
someone born after 1984 will need roughly an additional 3,200 units of
housing. Households headed by someone born between 1966 to 1984 will
demand roughly 230 units of housing. Households headed by someone born
between 1945 to 1964 will need roughly 200 fewer units of housing than they
do today. Finally, households headed by someone born before 1945 will need
roughly 1,800 fewer units than they need today. After accounting for the units
freed up by departing seniors and the units needed to maintain a healthy
vacancy rate, this translates into net demand for roughly 1,200 multifamily
units and 210 single-family units by 2020. For the Status Quo scenario,
correspondingly, the multi-family demand is estimated at 720 units and 260
for single-family. This detailed break out of type of units cannot be projected
as far out as 2030.
Salem Housing Needs and Demand Analysis | July 22, 2015
39
Figure 20 shows the change in housing unit demand between 2010 and 2020
by age, according to the Stronger Region scenario. These projections should be
used as a guide to inform future housing production. In Figure 20, increases in
demand are the result of new households forming, in-migration, or increasing
preference for certain types of housing. Decreases in demand are the result of
outmigration, mortality, or decreased preference for a given housing unit type.
In this scenario, projections show greater demand for multifamily renters. While
much of this demand can be met by downsizing seniors, the net demand shows
greater preference for multifamily rental housing.
Figure 20: Change in Housing Unit Demand by Age Cohort, Stronger Region,
2010-2020, City of Salem
By comparison, should fewer young workers migrate into the city or choose to
stay, demand for multifamily units among householders born after 1966 is
projected to be slightly lower than in Stronger Region:
-3000
-2000
-1000
0
1000
2000
3000
4000
15-34 35-54 55-74 75+Number of Housing Units Age in 2010
Renter-Occupied - Single
Family
Renter-Occupied -
Multifamily
Owner-Occupied - Single
Family
Owner-Occupied -
Multifamily
Salem Housing Needs and Demand Analysis | July 22, 2015
40
Figure 21: Change in Housing Unit Demand by Age Cohort, Status Quo, 2010-
2020, City of Salem
These projections similarly suggest greater demand for multifamily housing
through 2020.
In total, by 2030, assuming the Status Quo scenario, Salem will need to produce
a total of 1,900 units of housing to meet demand. Alternatively, should more
young householders choose to migrate in or remain in the city per the Stronger
Region scenario, Salem will need to produce a total of 2,700 units of housing
by 2030 to meet demand.
Furthermore, tabulations of this data by age, income, and household size will
provide greater insight into future housing demand needs.
Table 10: Net Housing Unit Demand by Age Cohort and Income, 2010-2030,
City of Salem
Householder
Cohort, by
Age
in 2010
Income
(As Percentage of
Area Median Income)
Projected Change in
Housing Unit
Demand, 2010-2030
Under 34 Less than 30% 591
Between 30-50% 737
-3000
-2000
-1000
0
1000
2000
3000
4000
15-34 35-54 55-74 75+Number of Housing Units Age in 2010
Renter-Occupied - Single
Family
Renter-Occupied -
Multifamily
Owner-Occupied - Single
Family
Owner-Occupied -
Multifamily
Salem Housing Needs and Demand Analysis | July 22, 2015
41
50-80% 352
Greater than 80% 2,569
35-64
Less than 30% 490
Between 30-50% 177
50-80% -40
Greater than 80% 2,600
65+
Less than 30% -600
Between 30-50% -306
50-80% -88
Greater than 80% -3,838
Vacancy Rate ** 81
Grand Total 2,725
Source: MAPC Projections; **Vacancy Rate indicates the number of units
necessary to stabilize the market
Table 10 depicts projected change in housing unit demand between 2010 and
2030: although there is a projected net increase in demand among younger
householders, most of that demand will be met by downsizing seniors. Lastly,
most of the demand for affordable housing will occur among younger
householders under 34.
Salem Housing Needs and Demand Analysis | July 22, 2015
42
Table 10B: Net Housing Unit Demand by Age Cohort and Household Type, 2010
– 2030 City of Salem,
Household
Type
Householder Cohort,
by Age
in 2010
Projected Change in
Housing Units, 2010-
2030
Family
Under 34 2,070
35-64 2,240
65+ -2,809
Non-Family
Under 34 2,179
35-64 987
65+ -2,023
Vacancy Rate ** 81
Grand Total
2,725
Source: MAPC Projections; **Vacancy Rate indicates the number of units
necessary to stabilize the market
A cross-tabulation of projections by household type and age in 2030 shows
demand increasing among younger family households and a relatively smaller
net increase in demand among 35-64 non-family households.
Table 11: Net Housing Unit Demand by Income and Household Size, 2010 –
2030, City of Salem
Percentage of
Area Median
Income
Household Size
Projected Change
in Housing Unit
Demand, 2010-
2030
Less than 30%
1 349
2- 3 115
4+ 17
Between 30-50%
1 319
2- 3 249
4+ 39
Between 50-80% 1 73
2- 3 145
Salem Housing Needs and Demand Analysis | July 22, 2015
43
4+ 6
Greater than 80%
1 324
2- 3 816
4+ 191
Vacancy Rate ** 81
Grand Total 2,725
Source: MAPC Projections; **Vacancy Rate indicates the number
of units necessary to stabilize the market
When cross-tabulating by area median income and household size, the
Stronger Region scenario suggests most of the increase in low-income
households (<50% AMI) between 2010 and 2030 will be in single person
households. For householders earning above 80 percent, most demand is
projected to be concentrated among 2-3 person households.
Salem Housing Needs and Demand Analysis | July 22, 2015
44
Housing Affordability
In the previous sections, Salem’s population and housing stock and market
conditions were examined. The intersection of the two—demand (people) and
supply (housing)—as well as policy and planning priorities, helps determine
housing affordability in a given community. In this section, the affordability of
Salem’s housing stock to residents is assessed.
Key Findings
At 12.4%, Salem’s count of subsidized housing inventory surpasses the
Commonwealth’s 10% affordable housing target. Salem has the highest
SHI percentage in the North Shore subregion. However, the deed
restrictions on many units are set to expire, and if they do, Salem would
fall below the 10% SHI target.
Poverty remains largely concentrated in urban areas in the subregion,
including Salem, which has a 12% poverty rate.
46% of Salem households are categorized as low-income. 46% of elderly
non-family households are low-income.
46% of Salem households spend more than 30% of their incomes on
housing costs and are considered housing cost burdened.
Salem’s median gross rent is lower than the North Shore, and lower than
HUD-calculated fair market rents for efficiency units.
Salem has largely recovered from the foreclosure crisis in 2007, but saw
an uptick between 2012 and 2013.
Since 2012, an average of 48 housing units per year have been converted
to condominiums.
Poverty Rate
The rate of poverty in a community has important consequences for housing
need. Because these families have less buying power, a large number of
families earning under the poverty line in a given community signals a growing
Salem Housing Needs and Demand Analysis | July 22, 2015
45
need for affordable housing. According to the U.S. Census Bureau, the poverty
threshold is defined as three times the cost of a minimum food diet in today's
prices. Families with incomes below this limit are considered impoverished.
Compared with surrounding communities, Salem is among several communities
that gained a larger share of the region’s population in poverty over over the
last decade. Within the North Shore, both suburban and urban communities
have seen similar increases. With no profound shift of poverty to any one
particular type of community, housing needs in Salem must be addressed
through targeted, place based interventions designed for the specific needs of
the community.
Salem falls under the MAPC definition of a "Sub-Regional Urban Center", in
which communities show "high population densities; a large proportion of
multifamily housing; moderate and high-density neighborhoods surrounding a
large and historically significant downtown, and other features generally
considered to represent urbanity." Communities of this type have actually seen
increases in both their share of the region's poverty and their poverty rates
between 2000 and 2010.
Salem Housing Needs and Demand Analysis | July 22, 2015
46
Salem's rate of families with incomes below the poverty level is substantial. The
city’s current rate of 12% represents an increase from the 2010 rate of 10%. It’s
also higher than the rate of 10.6% for the Metropolitan Statistical Area and the
Commonwealth’s rate of 11.8%. Most of Salem’s families living below the
poverty level are headed by female householders and include children 18 years
of age or younger. Table 11 shows the rate of poverty for each family type. For
example, 19% of all families with related children under 18 are living under the
poverty level.
Table 10: Percentage of Families with Incomes below the Poverty Level, City of
Salem
Family Type Count Percentage
All Families 1,159 12%
With Related Children Under 18 886 19%
Married Coupled 176 3%
With Related Children Under 18 108 5%
Families with Female Householders 800 26%
With Related Children Under 18 647 32%
Salem Housing Needs and Demand Analysis | July 22, 2015
47
Source: U.S. Census Bureau, 2009-2013 American Community Survey
In particular, the Point neighborhood in Salem has a relatively high rate of
poverty. However, the neighborhood enjoys a relatively higher share of
affordable housing stock, acting as a gateway to affordable housing in the
community and providing "resources and connections to public and private
sector entities that enable residents of all ages to connect to job opportunities,
education and career development resources." According to its 2013 Vision and
Action Plan, "a larger percentage of households in the Point versus the City of
Salem as a whole meet federal poverty guidelines – 20% of households in the
Point versus 11% of households in the City of Salem (Census 2010 tract level
median estimates)."5 Considering the neighborhood's relatively low median
gross rents and proximity to public transit, the plan concludes, "measures must
be taken to ensure that future development occurs to mitigate displacement
and ensure housing affordable to a range of incomes." For the Salem
community as a whole, the plan stresses that housing development in other
parts of the city should include income-restricted units to help maintain access
to affordable housing opportunities.
Households Eligible for Housing Assistance
One measure of affordable housing need is the number of households eligible
for public housing assistance or housing subsidies. Federal and state programs
use area median income (AMI), along with household size, to determine
eligibility. (The Area Median Income for a family of four is $98,500.) The table
below shows U.S. Department of Housing and Urban Development (HUD)
income limits for extremely-low- (below 30% of AMI), very-low- (30-50% of
AMI), and low-income (50-80% of AMI) households by household size for the
Boston-Cambridge-Quincy Metropolitan Statistical Area (MSA), which includes
5 Creating a Vision, Strengthening a Community: A Vision and Action Plan for the Point
Neighborhood in Salem 2013 – 2020. August 2013
Salem Housing Needs and Demand Analysis | July 22, 2015
48
Salem. Typically, households at or below 80% of AMI qualify for housing
assistance, though there are some exceptions based on household size.
Table 11: Affordable Housing Income Limits, Boston-Cambridge-Quincy, MA-
NH HUD Metro FMR Area
Because HUD’s regulations are based in part on household size, it is important
to understand how Salem's income distribution as a percent of AMI corresponds
with this variable. The most relevant information available is Comprehensive
Housing Affordability Strategy (CHAS) data, which groups number of persons
occupying a unit into household type:
small related households (2 persons, neither 62 years of age or over, or 3
or 4 persons)
large related households (5 or more persons)
elderly households (1 or 2 persons, with either or both age 62 or over)
all other households (singles, non-related living together)
Table 12: Income as Percent of AMI by Household Type/Size
Household Type Total Low-Income Households
< 30% 30-50% 50-80% > 80%
Elderly
Households 1793 284 (16%) 310 (17%) 234 (13%) 965 (54%)
FY15
Income
Limit
Category
1
Person
2
Person
3
Person
4
Person
5
Person
6
Person
7
Person
8
Person
Very Low
Income
(50%)
$34,50
0
$39,40
0
$44,35
0
$49,25
0
$53,20
0
$57,15
0
$61,10
0
$65,05
0
Extremely
Low Income
(30%)
$20,70
0
$23,65
0
$26,60
0
$29,55
0
$31,95
0
$34,30
0
$36,73
0
$40,89
0
Low Income
(80%)
$48,80
0
$55,80
0
$62,75
0
$69,70
0
$75,30
0
$80,90
0
$86,45
0
$92,05
0
Salem Housing Needs and Demand Analysis | July 22, 2015
49
Elderly Non-
Family
Households 2,575 1,030 (40%) 655 (25%) 335 (13%) 555 (22%)
Large Family
Households 780 140 (18%) 115 (15%) 105 (13%) 420 (54%)
Other Households 5,445 1,100 (20%) 655 (12%) 485 (9%)
3,205
(59%)
Small Family
Households 7,070 965 (14%) 725 (10%) 1,040 (15%)
4,340
(61%)
Total 17,66
3 3,519 (20%)
2,460
(14%) 2,199 (12%)
9,485
(54%)
Source: HUD Comprehensive Housing Affordability Strategy (CHAS), 2007-11
Fair Market Rents
Another measure of housing affordability is whether local rent exceeds Fair
Market Rents (FMR), or maximum allowable rents (not including utility and other
allowances), determined by HUD for subsidized units in the Boston MSA. In
Table 13 below, the upward trend reflects the annual adjustment factor
intended to account for rental housing market demands. Given the constraints
on the Greater Boston rental housing market, rising rent is unsurprising and
points to the need for more housing of this tenure at multiple price points.
Salem Housing Needs and Demand Analysis | July 22, 2015
50
Table 13: Fair Market Rents
Massachusetts General Law Chapter 40B Subsidized Housing Inventory
Under M.G.L. Chapter 40B, affordable housing units are defined as housing that
is developed or operated by a public or private entity and reserved by deed
restriction for income-eligible households earning at or below 80% of the area
median income, which is $98,500 for the Boston-Cambridge-Quincy, MA-NH
HUD Metro Fair Market Rent Area.
Additionally, all marketing and placement efforts for income-eligible
households follow Affirmative Fair Housing and Marketing Plan guidelines per
the Massachusetts Department of Housing and Community Development
(DHCD).
Housing that meets these requirements, as well as some market rate units that
are in developments that include affordable housing, qualify for the Subsidized
Housing Inventory (SHI). Chapter 40B allows developers of low- and moderate-
income housing to obtain a comprehensive permit to override local zoning and
other restrictions if less than 10% of a community’s year-round housing
inventory is included on the SHI.
Salem Housing Needs and Demand Analysis | July 22, 2015
51
A municipality’s SHI fluctuates with new development of both affordable and
market-rate housing. The percentage is determined by dividing the number of
affordable units by the total number of year-round housing units according to
the most recent decennial Census. As the denominator increases, or if
affordable units are lost, more affordable units must be produced to reach,
maintain, or exceed the 10% threshold.
Salem has reached that threshold. As of June 2015, 2,466 out of 18,998 units,
or 12.98%, were included on the SHI. However, over the next five years, the city
stands to lose up to 777 of these affordable units due to expiring deed-
restrictions. Numerous individual units that received assistance from the city for
housing rehabilitation will expire from the inventory. However, several larger
developments are also set to expire. In particular, Loring Towers and Princeton
Crossing are in need of an extension to their affordability restrictions to ensure
that units are preserved, maintained on the inventory, and remain available to
income-eligible households in need.
The remainder of the SHI units not set to expire before 2021 are listed in Table
14. These units include 706 Salem Housing Authority units and other units with
longer-term deed restrictions to preserve affordability.
Table 14: City of Salem Subsidized Housing Inventory
Project Name
SHI
Units
Comprehensi
ve Permit Yr End Tenure
Subsidizing
Agency
Salem HOR 1 NO 1/19/2021
Ownershi
p DHCD
Salem HOR 3 NO 1/24/2021
Ownershi
p DHCD
Salem HOR 1 NO 2/3/2021
Ownershi
p DHCD
Salem HOR
Program 1 NO 2022
Ownershi
p HUD
Salem HOR 1 NO 2023 Rental HUD
Salem Housing Needs and Demand Analysis | July 22, 2015
52
Project Name
SHI
Units
Comprehensi
ve Permit Yr End Tenure
Subsidizing
Agency
Program
Salem HOR
Program 1 NO 2023 Rental HUD
Salem HOR
Program 1 NO 2024 Rental HUD
Salem HOR
Program 1 NO 2024 Rental HUD
Salem HOR
Program 4 NO 2024 Rental HUD
Fairweather
Apartments 127 NO 2025 Rental HUD
Salem HOR
Program 1 NO 2026 Rental HUD
Salem HOR
Program 1 NO 2027 Rental HUD
Salem HOR
Program 1 NO 2027 Rental HUD
Salem HOR
Program 1 NO 2029
Ownershi
p HUD
104 Lafayette St 10 NO 2031 Rental DHCD
Salem Point
Rentals 44 NO 2034 Rental DHCD
Salem Point
Rentals 15 NO 2036 Rental DHCD
HES Housing I 9 NO 2037 Rental DHCD
Residential
Options 3 NO 2041 Rental EOHHS
Palmer Cove 15 NO 2056 Rental DHCD
Salem HOR
Program 1 NO 2057 Rental HUD
Salem Point
Cooperative 77 NO 2091 Rental FHLBB
Salem Heights 285 NO 2103 Rental HUD
Salem Housing Needs and Demand Analysis | July 22, 2015
53
Project Name
SHI
Units
Comprehensi
ve Permit Yr End Tenure
Subsidizing
Agency
135 Lafayette 51 YES 2111 Rental
MassHousin
g
North River
Apartments 4 NO Perp Rental DHCD
Scattered Sites 9 NO Perp Rental HUD
Stephen Zisson
Elderly 14 NO Perp Rental HUD
5 Barton Square 16 NO Perp Rental HUD
Garden Terrace 32 NO Perp Rental DHCD
Rainbow Terrace 136 NO Perp Rental DHCD
Charter Street 110 NO Perp Rental DHCD
Colonial Terrace 40 NO Perp Rental DHCD
J. Michael Ruane 16 NO Perp Rental DHCD
James A. Dalton
Residence 35 NO Perp Rental DHCD
Leefort Terrace 50 NO Perp Rental DHCD
Bertram Terrace 20 NO Perp Rental DHCD
Morency Manor 54 NO Perp Rental DHCD
Norton Terrace 20 NO Perp Rental DHCD
Bates Terrace 16 NO Perp Rental DHCD
Pioneer Terrace 104 NO Perp Rental DHCD
Phillips School 17 NO Perp Rental DHCD
Farrell Court 12 NO Perp Rental DHCD
Park/Prince/Cong
ress 14 NO Perp Rental DHCD
Pequot Highlands 250 NO Perp Rental
MassHousin
g
DDS Group
Homes 65 NO Rental DDS
Total Other Units
1,689
Source:
DHCD 2015
Salem Housing Needs and Demand Analysis | July 22, 2015
54
Based upon the SHI information above and if 777 units on the SHI were to
expire, Salem would have 1,689 units remaining on the inventory and the SHI
percentage would fall to 8.89%. The city’s current 10% goal is 1,899 based upon
the 2010 Total Year-Round Housing Units number. Further, if the city achieves
the projected 2020 housing unit need of 20,400 units (described earlier in this
analysis), then the city would need 2,042 SHI-qualifying units to meet the 10%
target. If the 777 expiring units were lost from the current inventory, then the
city would need to replace them with 353 additional SHI units by 2020. MAPC
recognizes that this does not take into consideration potential forthcoming
developments which may include affordable housing units nor does it include
any potential efforts to preserve those units which are projected to expire by
2020.
Salem Housing Needs and Demand Analysis | July 22, 2015
55
Table 15: Affordable
Housing Unit Need
SUBTOTAL
EXPIRING BY
2020
777
Total Other
Units 1,760
Current SHI 2,466
2010 Total
Year-Round
Housing Units 18,998
10% Goal 1,899
Percentage 12.98
Total minus
units expiring
by 2020 8.89
2020 Projected
Year-Round
Housing Units 20,424
10% Goal 2,042
Affordable
Housing Unit
Need 353
Within the context of the 16 other North Shore communities, Salem joins
Beverly and Danvers, at 11.8% and 10.0% respectively, with the highest
inventories of affordable housing.
Table 15: NSTF Subsidized Housing Inventories
Municipality % SHI
Beverly 11.8%
Danvers 10.0%
Essex 2.7%
Gloucester 7.2%
Salem Housing Needs and Demand Analysis | July 22, 2015
56
Hamilton 3.0%
Ipswich 8.6%
Manchester 4.8%
Marblehead 3.9%
Middleton 5.0%
Nahant 3.0%
Peabody 9.2%
Rockport 3.9%
Salem 13.0%
Swampscott 3.7%
Topsfield 6.8%
Wenham 8.7%
Source: DHCD 2015
The Salem Housing Authority manages 706 state-aided public housing units in
the city of Salem and those units are listed on the Salem SHI.
Table 16: Salem Housing Authority Units on the Subsidized Housing Inventory
Address Number
of Units
HUD
Program
Year
Built Type
Leefort
Terrace 50 667-2 1958 Elderly/
Disabled
Bertram
Terrace 20 667-1A 1959 Elderly/
Disabled
Colonial
Terrace 40 667-2 1961 Elderly/
Disabled
Bates
Terrace 16 667-7A 1818 Elderly/
Disabled
Pioneer
Terrace 104 667-4 1966 Elderly/
Disabled
Charter St 110 667-5 1974 Elderly/
Disabled
Salem Housing Needs and Demand Analysis | July 22, 2015
57
Morency
Manor 54 667-6 1982 Elderly/
Disabled
Dalton
Residence 35 667-7B 1988 Elderly/
Disabled
Zisson
Residence 14 705-2 Various Family
Farrell Ct 12 705-3 1987 Family
Phillips
School 17 689-1 1984 Special
needs
Garden
Terrace 32 200-1 1949 Family
Rainbow
Terrace 136 200-2 1949 Family
Norton
and Barton 36 667-3 1963 Elderly/
Disabled
J. Michael
Ruane 14 No Data No
Data Congregate
Park/
Prince/
Congress
16 No Data No
Data No Data
Housing Cost Burden
Another method to determine whether housing is affordable to a community’s
population is to evaluate households’ ability to pay their housing costs based
on their reported gross household income. When housing costs are too high,
families are unable to spend income on other necessities and the local
economy. Households that spend more than 30% of their gross income on
housing are considered to be housing cost burdened, and those that spend
more than 50% are considered to be severely cost burdened. HUD considers a
rate of 30% or higher cost-burdened households and 15% severely cost-
burdened households to pose a significant issue for a community.
Figure 21: North Shore Task Force Cost-Burdened Households
Salem Housing Needs and Demand Analysis | July 22, 2015
58
Compared to the North Shore, Salem has the highest rate of cost-burden, at
nearly 50%. Analysis of cost burden by household type reveals that elderly non-
family households experience the highest rates of cost burden in the city.
Although Salem's proximity to public transit and low gross rents may help to
defray costs and free up family budgets for other necessities, significant levels
of severe cost burden (spending more than 50% of income on housing costs)
suggests limited affordability in the housing market.
Table 17: Cost Burden by Household Type, All Households, City of Salem
Household Type Households Cost Burden Severe Cost Burden
Count Percent Count Percent
Elderly Family (1-2
Members) 1,793 593 33.1% 323 18.0%
Elderly Non-Family 2,575 1,325 51.5% 635 24.7%
Large Related (5+
Persons) 780 340 43.6% 190 24.4%
Other 5,445 2,415 44.4% 1,210 22.2%
Small Family (2-4
Persons) 7,070 2,660 37.6% 1,680 23.8%
Total 17,663 7,333 41.5% 4,038 22.9%
Source: HUD Comprehensive Housing Affordability Strategy (CHAS),
45.8%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%SalemEssexGloucesterPeabodyRockportSwampscottBeverlyNahantIpswichWenhamMarbleheadManchesterDanversMiddletonTopsfieldHamiltonPercent of Total Households Source: HUD Comprehensive Housing Affordability Strategy (CHAS), 2007-
11
Salem Housing Needs and Demand Analysis | July 22, 2015
59
2007-2011
Because households of any income level can be cost burdened just by buying or
leasing dwelling units they cannot afford even if alternative market-rate
housing is affordable to them, it is important to consider rates of cost burden
among low-income households specifically, who tend to have fewer options. In
Salem, these households tend to be comprised of "other" households, or non-
family households. These households may tend to be younger workers,
suggesting a lack of affordable housing for young workers entering the
workforce.
Table 18: Cost Burden by Household Type, Low-Income Households, City of
Salem
Household Type Total Cost
Burden
Severe
Cost
Burden
Elderly Family (1-2
Members) 828 51.1% 30.2%
Elderly Non-Family 2,020 57.9% 32.9%
Large Related (5+
Persons) 360 72.2% 38.9%
Other 2,240 75.0% 51.6%
Small Family (2-4
Persons) 2,730 69.8% 32.1%
Total 8,178 66.5% 37.7%
Source: HUD Comprehensive Housing Affordability Strategy (CHAS),
2007-2011
An analysis of cost burden among low-, very-low-, and extremely-low-income
households provides further insight.
Salem Housing Needs and Demand Analysis | July 22, 2015
60
Table 19: Cost Burden by Household Type, Low-Income Households, City of
Salem
Household Type
30-50% AMI 50-80% AMI Less Than 30% AMI
Total
Severe
Cost
Burden
Cost
Burden Total
Severe
Cost
Burden
Cost
Burden Total
Severe
Cost
Burden
Cost
Burden
Elderly Family (1-2
Members) 310 35.5% 62.9% 234 10.7% 27.4% 284 40.5% 57.7%
Elderly Non-Family 655 22.9% 69.5% 335 10.4% 49.3%
1,030 46.6% 53.4%
Large Related (5+
Persons) 115 39.1% 65.2% 105 23.8% 85.7% 140 50.0% 67.9%
Other 655 51.1% 84.0% 485 16.5% 49.5%
1,100 67.3% 80.9%
Small Family (2-4
Persons) 725 13.8% 86.2% 1,040 18.8% 52.9% 965 60.1% 75.6%
Total
2,460 30.1% 77.2% 2,199 16.4% 50.4%
3,519 56.4% 69.0%
Source: HUD Comprehensive Housing Affordability Strategy (CHAS),
2007-2011
Salem Housing Needs and Demand Analysis | July 22, 2015
61
Housing Problems for Middle-Income Households
CHAS data also indicates the extent to which middle-income households
earning 80-120% of AMI suffer from housing problems. A household is said to
have a housing problem if it has one or more of the following problems:
housing unit lacks complete kitchen facilities; housing unit lacks complete
plumbing facilities; household is overcrowded, and/or household is cost
burdened.
2009-2013 ACS data estimates indicate that less than 2% Salem’s occupied
housing units are afflicted by problems #1, #2, or #3. Therefore, it can be
assumed that the housing problem affecting most Salem residents at this
income level is #4: cost burden. The table below shows that half of middle-
income homeowners are cost-burdened, versus only 15% of middle-income
renters.
Table 20: Housing Problems for Salem Households at 80-120% of AMI
Type of Household with Problem Number of
Households
Percentage
of
Households
Owner-Occupied Households 1,990 60%
With Housing Problems 1,010 30%
Renter-Occupied Households 1,345 40%
With Housing Problems 210 6%
Source: HUD Comprehensive Housing Affordability Strategy (CHAS),
2007-2011
Foreclosures
Foreclosure trends inform the extent to which owner-occupied households
struggle to afford housing costs in a given community. While the Greater
Boston region was spared the worst impacts of the recent recession and
housing bubble, the same cannot be said of the foreclosure and subprime
mortgage crisis. Foreclosures in the region surged over the last decade. This is
Salem Housing Needs and Demand Analysis | July 22, 2015
62
important because as homes become foreclosed, households are forced to
relocate, often increasing demand for affordable housing options. While Salem
largely recovered from the height of the foreclosure crisis, the community
experienced an uptick between 2012 and 2013 after a slight dip between 2011
and 2012.
Salem Housing Needs and Demand Analysis | July 22, 2015
63
Figure 22: Foreclosure Deeds in Salem, 2007-2013
In 2013, 40 foreclosure deeds were issued in Salem, the most in the North
Shore Subregion. Peabody had a total of 31foreclosure deeds issued that year,
while Gloucester and Danvers had 16 and 15, respectively. Salem also had the
highest number of Petitions to Foreclose in 2013 and the highest Foreclosure
Auctions in 2013 when compared to the subregion.
Figure 23: Foreclosure Deeds Issued on the North Shore, 2013
Table 21: Foreclosure Petitions, Auctions, and Deeds Issued on in Salem, 2013
Municipality Petitions to
Foreclose,
Foreclosure
Auctions,
Foreclosure
Deeds,
Foreclosure
Deeds % of
171
68
58 63
49
16
40
0
20
40
60
80
100
120
140
160
180
2007 2008 2009 2010 2011 2012 2013
Source: The Warren Group
0
5
10
15
20
25
30
35
40
45
Foreclosure Deeds, 2013Source: The Warren Group
Salem Housing Needs and Demand Analysis | July 22, 2015
64
2013 2013 2013 units
(2013)
Beverly 27 22 6 0.04%
Danvers 17 29 15 0.13%
Essex 3 6 0 0.00%
Gloucester 12 29 17 0.12%
Hamilton 3 8 2 0.07%
Ipswich 13 14 6 0.10%
Manchester 2 0 2 0.08%
Marblehead 10 22 5 0.06%
Middleton 8 5 6 0.20%
Nahant 4 2 0 0.00%
Peabody 40 62 31 0.14%
Rockport 4 9 4 0.09%
Salem 41 64 40 0.21%
Swampscott 9 13 1 0.02%
Topsfield 4 4 3 0.14%
Wenham 1 2 0 0.00%
Source: The Warren Group
Condominium Conversions
Another threat to the affordable rental housing stock is the conversion of rental
units to condominiums. The conversion of a residential unit to a condominium
signals the removal of rental units from the market based on the assumption
that condominiums are typically owner-occupied and not leased to those in the
rental market. This type of redevelopment burdens the affordable housing
market as rental units are absorbed into the higher-end of the housing market.
Using the Massachusetts Land Parcel Database and tax assessors data, MAPC
calculated the yearly average of condominium conversion by summing the total
number of units for properties of a given parcel over a given time period whose:
Salem Housing Needs and Demand Analysis | July 22, 2015
65
1. Land use code was residential and non-condominium at the beginning of
the period,
2. Land use code was condominium at the end of the period, and
3. Structure was built before the start of the time period.
Due to data limitations, this analysis used only two time periods to calculate the
yearly average. Between 2006 and 2011, approximately 160 units per year were
converted to condominiums. Between 2012 and 2015, approximately 42 units
per year were converted to condominiums. The decline in yearly conversions
suggests a cooling of the market since the last decade.
Table 22: 2006-2011 Condominium Conversions
Unit Type # of Properties
Estimate of
Units
Single Family 3 6
Two-Family 90 192
Three-Family 57 188
Multi (4+) 56 366
Undetermined 7 44
Total 213 796
Source: MAPC Analaysis; Tax Assessors Database; City of
Salem;
Table 23: 2012-2015 Condominium Conversions
Unit Type # of Properties Estimate of Units
Single Family 1 2
Two-Family 24 48
Three-Family 12 36
Multi (4+) 12 71
Undetermined 2 9
Total 51 166
Source: MAPC Analaysis; Tax Assessors Database; City of
Salem;
Salem Housing Needs and Demand Analysis | July 22, 2015
66
In Salem, the rate of units converted to condominiums has stayed consistent
since 2012 with an average of 48 units per year. These conversions have
tended to occur within Census tracts having median household incomes
between $50,000 and $70,000.
Figure 24: Condominium Conversions, 2006-2011; 2012-2015
Source: MAPC Analysis; MA Land Parcel Dataset; City of Salem;
Conclusion
Salem Housing Needs and Demand Analysis | July 22, 2015
67
Though Salem saw only modest population gains over the past decade, the
community is growing more diverse. As evidenced by its high rate of non-
family households and low average age, Salem is attracting and retaining young
residents and householders. Should these trends continue, Salem is expected to
see significant increases in housing demand over the coming decade.
The community also boasts a relatively high stock of historic, multifamily
homes occupied mostly by renters. To continue to retain and attract more
workers to fill labor gaps left by retiring baby boomers, Salem should continue
to maintain its high stock of multifamily housing.
Although Salem ranks high in rates of poverty and cost-burden status, its
proximity to transit and lower median gross rent prices help to defray costs.
Salem’s relatively count of subsidized housing inventory surpasses the
Commonwealth’s 10% affordable housing target, however, many units have
expiring deed restrictions which will situate Salem below 10% affordability.
Salem Housing Needs and Demand Analysis | July 22, 2015
68
III. Appendix
Table 24: City of Salem Subsidized Housing Inventory (6/5/15)
with Deed Restrictions expiring by 2020
Project Name
SHI
Units
Deed
Restriction
Year End Tenure
Subsidizing
Agency
Federal and
Boston
Streets 24 2015 Rental MHP
North Shore
CDC FTHB
Project 3 2015 Ownership DHCD
Salem
Housing
Rehabilitation
Program
(HOR)
Program 1 2015 Ownership HUD
Loring
Towers 250 2016 Rental MassHousing
Salem HOR
Program 1 2016 Ownership DHCD
Salem HOR
Program 3 2016 Ownership DHCD
Lynch Street 11 2017 Rental MHP
Princeton
Crossing
Apts 358 2017 Rental MassHousing
Salem HOR
Program 3 2017 Ownership DHCD
Salem HOR
Program 2 2017 Ownership DHCD
Salem Housing Needs and Demand Analysis | July 22, 2015
69
Table 24: City of Salem Subsidized Housing Inventory (6/5/15)
with Deed Restrictions expiring by 2020
Project Name
SHI
Units
Deed
Restriction
Year End Tenure
Subsidizing
Agency
Salem HOR
Program 1 2017 Ownership DHCD
Salem HOR
Program 1 2017 Ownership DHCD
Salem HOR
Program 1 2017 Ownership DHCD
Salem HOR
Program 1 2017 Ownership HUD
Salem HOR
Program 1 2017 Ownership HUD
Salem HOR
Program 2 2017 Ownership HUD
Salem HOR
Program 1 2018 Ownership FHLBB
Salem HOR
Program 1 2018 Ownership DHCD
Salem HOR
Program 1 2018 Ownership DHCD
Salem HOR
Program 1 2018 Ownership FHLBB
Salem HOR
Program 1 2018 Ownership DHCD
Salem HOR
Program 1 2018 Ownership DHCD
Salem HOR
Program 1 2018 Ownership DHCD
Salem HOR
Program 2 2018 Ownership DHCD
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70
Table 24: City of Salem Subsidized Housing Inventory (6/5/15)
with Deed Restrictions expiring by 2020
Project Name
SHI
Units
Deed
Restriction
Year End Tenure
Subsidizing
Agency
Salem HOR
Program 1 2018 Ownership HUD
Salem HOR
Program 2 2018 Ownership HUD
Salem HOR
Program 2 2018 Ownership HUD
Lincoln Hotel 62 2018 Ownership DHCD
Salem HOR 2 10/4/2019 Ownership DHCD
Salem HOR
Program 1 2019 Ownership DHCD
Salem HOR
Program 1 2019 Ownership DHCD
Salem HOR
Program 1 2019 Ownership HUD
Salem HOR
Program 1 2019 Ownership HUD
Salem HOR
Program 1 2019 Ownership HUD
Salem HOR
Program 1 2019 Ownership HUD
Salem HOR
Program 1 2019 Ownership HUD
Salem HOR
Program 3 2019 Ownership HUD
Salem HOR 1 2019 Ownership DHCD
Salem HOR
Program 1 10/2/2019 Ownership HUD
Salem HOR 1 11/18/2019 Ownership DHCD
Salem Housing Needs and Demand Analysis | July 22, 2015
71
Table 24: City of Salem Subsidized Housing Inventory (6/5/15)
with Deed Restrictions expiring by 2020
Project Name
SHI
Units
Deed
Restriction
Year End Tenure
Subsidizing
Agency
Salem HOR 2 12/01/2019 Ownership DHCD
Salem HOR 1 5/2/2020 Ownership DHCD
Salem HOR 1 6/9/2020 Ownership DHCD
Salem HOR 1 8/14/2020 Ownership
Salem HOR 1 8/14/2020 Ownership DHCD
Salem HOR 1 11/8/2020 Ownership DHCD
Salem HOR 2 12/6/2020 Ownership DHCD
Salem HOR 1 12/28/2020 Ownership DHCD
Palmer Street 10 2020 Rental MHP
Salem HOR
Program 3 2020 Ownership HUD
TOTAL 777 Source: DHCD 2015