South Salem Commuter Rail a Study in Market Potetial - Summer 2017FROM TRAIL-ORIENTED DEVELOPMENT
TO TRANSIT-ORIENTED DEVELOPMENT:
A STUDY OF MARKET POTENTIAL
SUMMER 2017
SOUTH SALEM
ACKNOWLEDGMENTS
MAPC would like to thank our project partners from the City of Salem, the Salem Partnership, and the South Salem Station Working Group for their assistance
and input throughout the entirety of this project.
To request additional copies of this document contact:
Chris Kuschel
ckuschel@mapc.org
617.933.0731
MAPC Staff
Chris Kuschel, AICP, Project Manager, Senior Regional Planner
Amanda Chisholm, AICP, Chief Economic Development Planner
Josh Fiala, AICP AIA LEED AP, Senior Land Use Planner
Barry Keppard, AICP, Public Health Director
Karina Milchman, AICP, Regional Planner II & Housing Specialist,
Coordinator of the Inner Core Committee
Travis Pollack, AICP, Senior Transportation Planner
South Salem Station Working Group
Kimberly Driscoll, Mayor, City of Salem
Tom Daniel, AICP, Director Planning and Community Development, City
of Salem
Beth Debski, AICP, Executive Director, Salem Partnership
Laura Fleming, North Shore Medical Center
David Hark, The Drumlin Group
Sandy Heaphy, MHP Enterprises, Inc.
John Keenan, Salem State University
Adria Leach, Salem State University
Mark Leavitt, Salem Touchless Car Wash
James Muse, The Salem Partnership
Mickey Northcutt, North Shore Community Development Coalition
Matt Picarsic, The Salem Partnership
01 INTRODUCTION
02 BACKGROUND
02 SOUTH SALEM STATION PLANNING
05 ASSESSING THE IMPACTS
06 PLANNING PROCESS
07 SUMMARY OF RECOMMENDATIONS
09 EXISTING CONDITIONS
09 LOCATION
12 TRANSPORTATION NETWORK
16 ZONING AND LAND USE
24 KEY STAKEHOLDERS
26 PUBLIC HEALTH
31 MARKET ANALYSIS
31 MARKET STUDY CONTEXT
38 RESIDENTIAL MARKET ANALYSIS
50 COMMERCIAL ANALYSIS OVERVIEW
51 RETAIL MARKET ANALYSIS
55 OFFICE MARKET ANALYSIS
CONTENTS65 DEVELOPMENT SCENARIOS
66 TRAIL-ORIENTED DEVELOPMENT OVERVIEW
68 DEVELOPMENT SCENARIO: TrOD
76 DEVELOPMENT SCENARIO: TOD
83 NEIGHBORHOOD CHANGE
83 INTRODUCTION TO NEIGHBORHOOD CHANGE
85 THREE SCENARIOS FOR CHANGE
86 RISKS ASSOCIATED WITH NEIGHBORHOOD CHANGE
89 MANAGING NEIGHBORHOOD CHANGE
91 RECOMMENDATIONS
101 TAX IMPACT ANALYSIS
102 MBTA EXPANSION PROJECTS
102 VALUE CAPTURE OPTIONS
104 ESTIMATION OF FUTURE LOCAL TAXES
105 ESTIMATION OF FUTURE STATE TAXES AND JOB CREATION
106 IMPLICATIONS OF ANALYSIS
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1
With numerous restaurants, a walkable downtown, world-famous museums
and historic sites, and a commuter rail station providing access to Boston,
the City of Salem has experienced a revitalization in recent years. While the
downtown continues to grow and develop, the City is also looking towards other
areas for future growth. Among the City’s priorities is the area south of the
downtown from Washington Street to Jefferson Avenue (South Salem). Adjacent
to this area is:
»The Point, a diverse residential neighborhood;
»Salem State University (SSU), a growing university; and,
»North Shore Medical Center (NSMC), the largest healthcare provider in the
area and undergoing a major expansion.
In order to accommodate future growth, increase access for current and future
residents to Boston, and reduce the automobile needs for commuters to SSU
and NSMC, the City has set a long-term goal of bringing a commuter rail station
to this area of Salem. An additional commuter rail stop within the South Salem
area could help to reduce severe traffic and parking problems while offering
a convenient transportation alternative to residents and SSU commuting
students, staff and faculty. Equally important, a new stop will be a catalyst for
appropriately scaled transit-oriented development in the Canal Street area,
including mixed use with increased bicycle and pedestrian accommodations. INTRODUCTION
2
INTRODUCTION
BACKGROUND
The genesis for a second commuter rail station in
Salem traces back approximately 25 years. In
1989, the City contracted with CPF /Domenech &
Hicks, Inc. for the preparation of a Feasibility Study
for a Proposed Salem State College Commuter
Rail Station. At that time, the Feasibility Study
concluded that, “a stop would be physically feasible
and would be well supported by the potential
ridership of SSU students, faculty and staff.
Potential additional ridership could be at least
equal to current ridership at the existing Salem
Commuter Rail Station and could be much greater
(according to 1987 statistics as many as 1,400
riders per day). The existence of a station would
reduce traffic and parking congestion in the area
and would also help to fill return trains with ‘reverse
commuters’ from the Boston area.”
The MBTA conducted its own ridership survey in
2000 and determined that the new stop would
generate enough riders to justify its construction.
In fact, the MBTA put money in its five-year
capital budget for the stop. Although it came
close to fruition, the City at the time made the
decision to focus its energy on reconstructing the
existing station, the busiest in the entire MBTA
commuter rail network (excluding downtown Boston
locations). The station was moved north from its
previous location in 1987 and reconstructed with
ADA compliant facilities and other amenities. In
2002, the MBTA shifted the $8.1 million that
was set aside to build a commuter rail station in
South Salem to help pay for a new garage at the
downtown Salem commuter rail station. In 2014
construction of the new, 715 space garage was
completed.
SOUTH SALEM STATION PLANNING
The City has now returned its focus to
constructing a commuter rail station in
South Salem and understanding its effects on
the neighborhood and community at large. In
collaboration with the Salem Partnership and SSU,
the City has studied the feasibility of constructing
this second commuter rail station in Salem. The
Salem Partnership, a non-profit focused on City
revitalization, entered into a contract with AECOM to
examine the need for and feasibility of an additional
commuter rail station on the Newburyport/Rockport
line to be provided in the South Salem area,
supported in part by mitigation funds from Salem
State University. AECOM reviewed several potential
locations in the area bordered by Canal Street
and Jefferson Avenue for the station, prepared
conceptual design plans, developed cost estimates,
and identified advantages and disadvantages of
each of the potential locations. The proposed
stop would be sited along the MBTA’s East Route
(Rockport/Newburyport Line), approximately ¾ mile
south of the existing Salem Station at Washington
Street. The area currently includes railroad sidings
serving adjacent commercial properties. The
proposed stop would be designed and constructed
to current MBTA Commuter Rail Design Standards,
Massachusetts State Building Code, and the latest
ADA and MAAB requirements for accessibility.
Through a public process, the City has focused
on an alternative that best addressed abutter
concerns. AECOM then developed several options
for parking and connecting the station west towards
Jefferson Avenue and NSMC for the preferred
option, Location 3. According to the latest concept
plan for the South Salem commuter rail station,
the station would be built to accommodate the
proposed trail parallel to the railroad, with three
entrances to the northbound rail platform from the
trail.
3
LOCATION 4
LOCATION 3
LOCATION 2
LOCATION 1
Figure 1. Location alternatives for proposed South Salem commuter rail station Figure 2. South Salem Station Location 3 conceptual plans (Source: AECOM)
4
Location 3 satisfies most of the project objectives.
It also includes three design alternatives to provide
access to Jefferson Avenue and the North Shore
Medical Center from the station. Option A would
construct a 20 foot walkway (which would likely
also accommodate cyclists), while Options B and
C would include a vehicular driveway, parking, and
an 8 foot sidewalk. Each option would construct
a pedestrian bridge over the tracks with sloped
walkways connecting to both platforms, which also
would provide an east-west pedestrian connection
from Canal Street to Jefferson Avenue.
The proposed commuter rail concept includes
drop-off vehicular access from Canal Street. The
Jefferson Avenue side will provide additional
vehicular access, including a drop-off area and
potentially parking space.
The City needs to coordinate with the MBTA
to identify and investigate additional criteria,
including:
»Further identifying right-of-way impacts,
proposed property acquisitions and
associated costs;
»Determining potential impacts to abutters
(long and short term) and identify potential
mitigation;
»Ensuring that the station design does not
preclude the potential future plans of both
the MBTA and the City of Salem;
»Further identifying right-of-way impacts and
proposed property acquisitions;
»Coordinating with freight operators for
requirements of trackage rights agreements
and potential modifications necessitated by
the new stop.
»Coordinating with MBTA Railroad Operations
for the relocation of railroad sidings, tracks,
and signal systems serving the adjacent rail
yards; and,
»Identifying and developing long term
operations and maintenance requirements
and costs.
Figure 3. West side access and parking availability alternatives for Location 3. (Source: AECOM)
INTRODUCTION
5
ASSESSING THE IMPACTS
This report supplements the Feasibility Study
by assessing potential economic and related
impacts of a station on the project area. In
addition, the report provides recommendations
on how to best realize future development in
an equitable manner that allows residents and
visitors of a spectrum of income levels to be an
integral part of South Salem’s future. Analysis and
recommendations for scenarios with and prior to a
station include:
»A market analysis including residential, retail,
and commercial demand potential.
»Build-out analysis of development potential
based upon the market demand analysis and
site constraints
»Zoning recommendations to achieve market
potential
»On-road and off-road connectivity
improvements, including improved bus/
shuttle service
»Analysis of the existing surrounding
community area and recommendations
to help ensure inclusive, equitable
growth (incorporating affordable housing,
environmental justice, and public health
considerations)
»Analysis to determine the possible changes
to property tax receipts resulting from
projected possible changes in development
in the South Salem area
The City recognizes that constructing a new
commuter rail station, especially in today’s
economic climate, could be a longer term objective.
Furthermore, even without a station, the area
may not be meeting its potential. This report,
therefore, also analyzes and provides shorter-
term recommendations to achieve the area’s
potential prior to a station’s construction. These
recommendations will provide a roadmap for the
City to embark upon while it continues to seek
funding and approval of a South Salem station.
6
METROFUTURE
MetroFuture is the Greater Boston Region’s 30-
year plan, supporting smart growth and regional
collaboration through the promotion of efficient
transportation systems, conservation of land
and natural resources, improving the health and
education of residents, and increasing equitable
economic development opportunities. The South
Salem project conforms to many of the goals and
objectives identified in MAPC’s Metro Future Plan.
Specifically:
»Goal 1: Population and job growth will be
concentrated in municipalities already well
served by infrastructure, with slower growth
in less developed areas where infrastructure
is more limited. Salem is identified as a
Regional Urban Center in the Plan due to
existing infrastructure and potential for new
growth through reuse of existing buildings
and developed land;
»Goal 44: An expanded transit system will
provide better service to both urban and
suburban area, linking more homes and jobs;
»Goal 45: More people will use transit for work
and personal trips;
»Goal 46: Commuters will have more options
to avoid congestion; and,
»Goal 51: Regional transportation will be
linked with sustainable land use planning
and priority will be given to those projects
that support a land use plan that will
efficiently utilize new transportation capacity
to support sustainable growth.
Equity Considerations
Transit oriented development, when done right,
can help improve access to public transportation
for both residents and employees by creating
housing and job opportunities in close proximity
to transit. The combined household costs of
housing and transportation in many Boston
area communities can often exceed 50% of
household earnings. Creating ways to reduce auto
dependency through transit use can help lower
transportation costs, providing households with
more money to spend on other critical needs like
food, education, or child care. It is imperative
that some percentage or portion of new housing
around transit is accessible to those earning at
or below the area median income, so affordable
housing is available near transit for those who
need it most. Reducing auto dependency can
also help reduce localized congestion leading to
cleaner air and improved health outcomes for
residents. Encouraging more walking, biking, and
transit use can add healthy transportation options
and increase daily physical activity.
INTRODUCTION
PLANNING PROCESS
The 8 month planning process began in late
October 2016 and concluded in June 2017.
The work was done in two primary phases. The
first part focused on a future without a commuter
rail station. MAPC performed its analysis using
two complementary methodologies: the first was
a market demand assessment to gauge the near
to medium term potential for residential, retail,
and office uses in the Study Area. The second
used site-specific constraints (location, parcel size,
potential improvements) to create a potential future
development scenario. These two methodologies
were then replicated under a scenario with a
commuter rail station in South Salem.
Supplementing these two primary analyses was
work related to managing neighborhood change
and improving public health for the area’s current
and future residents.
Next steps
The City can use the results of this analysis to
plan for the immediate and longer term. The City
should begin to implement the recommendations
associated with the no-station scenario (later
referred to as the “trail-oriented development”
(TrOD) scenario) in the near term. It may begin
to implement these recommendations while it
pursues funding and approval for constructing
a South Salem station. Once funding for
construction has been approved, the City should
begin transitioning its implementation plans to
incorporate those recommendations specifically for
the new station.
7
SUMMARY OF RECOMMENDATIONS
The results of the analysis found two key findings:
1. A commuter station would unlock development
potential and have a strong economic impact
2. Even without a station, the area is underutilized
and with proper planning could see further
development
The recommendations are not intended as
alternatives based upon the two scenarios; rather,
the recommendations with a station build upon
(and, in some cases, modify) those for without a
station. The recommendations are organized into
several areas to maximize the area’s potential in an
equitable manner.
Land Use + Zoning
These recommendations focus on creating a new
zoning district throughout part of the Study Area
to capitalize on its existing and future assets. The
new district would allow for a mix of uses, especially
residential, and provide dimensional standards
appropriate to a walkable neighborhood.
Connectivity
These recommendations focus on creating a
multi-modal network throughout the Study Area
and to the downtown, existing station, Salem State
University, and North Shore Medical Center.
Economic Development
Many of the recommendations under Land Use +
Zoning and Connectivity will have a positive impact
on the area’s economic development. This section
provides additional recommendations related to
enhancing existing businesses and considering
alternative locations for industries that may not be
compatible with the area’s long-term goals.
Neighborhood Change
While the anticipated growth will bring many
positive aspects to the immediate area and City
as a whole, strategies are needed to ensure they
are equitably distributed, and that both new and
existing residents have the opportunity to take
advantage of them.
Public Health
Neighborhoods, including the physical built
environment as well as associated policies, can
have a tremendous impact on residents’ overall
health. This section provides strategies and
considerations to maximize existing and future
residents’ well-being.
8
9
LOCATION
Salem, located on the region’s North Shore 25 miles north of Boston, has
been experiencing a renaissance. Long a tourist hot spot, the City is now
becoming increasingly popular as a place of residence. A walkable downtown,
numerous restaurants, and direct commuter rail access to Boston have attracted
many people interested living in an urban, vibrant community.
The Study Area is located just to the south of downtown, beginning on Canal
Street at Washington Street. The Study Area is bounded by Canal Street on the
east and Jefferson Street on the west, omitting the single family districts. Figure
4 locates the Study Area within its broader context. Approximately half the site
is within a 1 mile walk of the existing commuter rail station, which is generally
considered the upper limit most people are willing to walk for rail service.1 In
addition, the entire site is within a 2 mile bike ride of the existing station, which is
approximately a 10 minute bike ride for the average person.
To the east, abutting a portion of the site is the Point, a dense and diverse
neighborhood with numerous residents. The study area stretches approximately
1.25 mile north-south and contains 88 parcels within its 96 acres.EXISTING CONDITIONS
10
1A half mile walkshed is generally used for rapid transit service, whereas a larger catchment area is often used for rail service. Indeed, stakeholder interviews confirmed numerous residents
walk from the Study Area to the commuter rail station. Also, note that the walk and bike shed provided in Figure 4 incorporate the network of roadways to provide a true 1 and 2 mile distance, as
opposed to a less accurate circular buffer (which depicts distance “as the crow flies”).
2 Salem Point Vision Action Plan. MAPC. 2013.
EXISTING CONDITIONS
To the east of the northern portion of the Study Area is the
neighborhood known as the Point. The neighborhood, a vibrant,
ethnically diverse community, contains numerous multi-family
homes with a high concentration of immigrants. This 195 acre
neighborhood is the densest in the City with approximately 33 people
per acre (population 4,100). In conjunction with MAPC, the City and
North Shore Community Development Coalition (NSCDC) recently
completed a visioning process for this neighborhood.2 Among the
various elements of the plan are recommendations around housing
and economic development. The Point neighborhood is home to the
largest stock of affordable rental housing in Salem. The City of Salem
and community partners are committed to securing new resources
that will improve the diversity and quality of housing available for
rent and for ownership as well as improving the diversity of amenities
available to people of all ages. The vision specifically states that
“Point neighborhood residents have access to both affordable
rental and ownership opportunities in the neighborhood that
meets their needs and stage in life, housing stock is compliant with
applicable codes and standards, and the neighborhood has different
recreational options that appeal to residents of all ages.”
Keeping the needs and vision of residents in adjacent neighborhoods,
such as the Point, is important to keep in mind when considering
future development in the Study Area. As will be explained further
in the Neighborhood Change section of this report, without careful
planning and various safeguards, the growth in the Study Area can
have deleterious effects on vulnerable populations.
In addition to the Point specifically, the needs of the numerous
residents in adjacent neighborhoods also must be considered,
especially those considered most vulnerable. For example, Figure 5
shows the number of “Environmental Justice” communities in and
around the Study Area. Environmental justice refers to the equal
Figure 4. Study Area Context
11
protection and meaningful involvement of all people with respect to
the development, implementation, and enforcement of environmental
laws, regulations, and policies, and the equitable distribution of
environmental benefits.
Figure 5. Environmental Justice Communities
12
EXISTING CONDITIONS
TRANSPORTATION NETWORK
Street Network
The primary roadways in the Study Area are Canal
Street and Jefferson Avenue with Lafayette
Street and Loring Avenue (Route 1A) proximate to
the site. Each are two-lane arterials running north-
south with on-street parking allowed in certain
areas. There are limited east-west connections
in the Study Area, with Jefferson Avenue on the
south end and Washington Street on the north end
as the only streets crossing the rail line. The other
east-west streets are mostly neighborhood (local)
streets, with the largest concentration between
Canal and Lafayette Streets.
Average daily traffic counts indicated that most of
the north-south traffic in the Study Area uses Loring
Avenue and Lafayette Street (Route 1A). Loring
Avenue averages 15,800 vehicles per day and
Lafayette Street averages 22,400 vehicles per day.
Canal Street counts are lower, at around 14,800
to 15,800 daily vehicles.3 (There are no counts
available for Jefferson Avenue.) Posted speeds for
all streets are either 25 MPH or 30 MPH.
Bicycle and Pedestrian Network
The current bicycle network includes the
Marblehead Trail, which runs through portions of
the SSU campus and currently ends at Canal Street,
as well as marked bicycle lanes along Lafayette
Street. The City of Salem Bicycle Circulation
3 2004 traffic counts from Massachusetts Department of Transportation (http://mhd.ms2soft.com/tcds/tsearch.asp?loc=Mhd&mod=) and Boston Metropolitan Planning Organization (http://www.
ctps.org/map/www/apps/adtApp/index.html). While the most recent counts are from 2004, they represent an overall comparison of traffic volumes in the study area.
Figure 6. Roadway Functional Classification
13
Master Plan (2010) recommended extending the
trail north, running parallel to the railroad and
ending at Washington Street in downtown Salem.
The plan also recommended adding a bicycle
lane along Loring Avenue, shared lane markings
(sharrows) on Jefferson Avenue, and a new shared
street bicycle route running north-south along local
streets east of Lafayette Street. Since adoption of
this plan many of the recommendations have been
completed or are in process. Lafayette Street, e.g.,
now contains bicycle lanes running from the City
line in the south up to Washington Street on the
edge of downtown. The City is now working with
Toole Design Group on an updated bicycle plan,
which is in the process of recommending additional
on-road bicycle facilities, especially throughout the
downtown.
Lafayette Street has the best facilities for
pedestrians in the study area, with wide sidewalks,
planting strips, and well-marked crosswalks. The
southern, residential portion of Jefferson Avenue
includes a strong sidewalk network, while the
northern portion, which is more commercial and
industrial, has an incomplete sidewalk network with
some missing segments and with narrow sidewalks
adjacent to the travel lanes with multiple curb cuts.
Loring Avenue includes sidewalks on both sides,
though with varying widths. The northern end of
the Marblehead Trail provides off-street pedestrian
access near the SSU campus.
MAPC has recently developed a tool called
Local Access Scores.4 These scores can help
communities prioritize sidewalk and bike route
improvements on the most useful connections
between residents and important local
destinations. This measure provides a robust,
quantitative estimate of current or potential
roadway utility for walkers and bikers. The Local
Access Score is calculated using travel demand
software that uses input data on population and
destinations to estimate the number of trips
households are likely to make in a given day, the
likely destinations of those trips, and the most
direct routes connecting households to their
destinations. The dataset contains a separate score
for four different types of destinations (school,
shops and restaurants, transit stations, and parks)
and two different modes (walking and biking), for
a total of eight basic scores. These scores are
combined and weighted to produce walking and
biking scores as well as an overall composite score.
The Composite Local Access Scores show how
useful each road segment would be for people
walking or biking from their homes to school, shops
and restaurants, parks, and transit stations. Figure
8 depicts the composite Local Access Score in
the study area and downtown. The heavy purple
lines represent those streets with the highest
pedestrian/bicycle utility; that is, if this were a good
place to walk or bike, many people would find it
a useful route. Within the study area, Jefferson
Avenue and most of Canal Street have high utility
scores (relative to other streets in Salem), as do
many of the downtown streets (which would be
expected given the numerous downtown amenities
and destinations). While the Local Access Scores
do not provide solutions or assess the feasibility of
constructing pedestrian/bicycle infrastructure, they
do confirm the importance that various roadways
can have vis a vis walking/biking and help the City
focus future investments.
Canal Street Reconstruction and
Shared Use Path
A multi-year, $12 million project has begun along
Canal Street. The Canal Street reconstruction
project will provide a new gateway to the City
of Salem while improving safety for vehicles,
pedestrians and bicycles. Work includes leveling
and resurfacing the road, constructing new
sidewalks and crossings with curb extensions,
and adding street trees and lighting. The work
will better define access locations and curb
cuts, improve pavement, signage and pavement
markings, as well as adding wheelchair ramps
and sidewalks following ADA standards. The
intersections at Mill Street and with Jefferson
Avenue and Loring Avenue are being reconfigured
to improve safety.
The project also includes an extension of the off-
street shared use path, which is being done in two
phases (Phase 2 is programmed in the 2018 State
Transportation Improvement Plan). The shared use
path will significantly improve the bicycle experience
for those traveling through South Salem toward the
downtown.
4 Please visit www.localaccess.mapc.org for additional
information, including detailed methodology access to the
data.
14
Figure 7. Bicycle Network Figure 8. Local Access Score
Lafayette Street
existing bike lanes
Shared use path extension
(under construction)
Existing shared use
path = Street segments
with highest bike/ped
utility (composite)
EXISTING CONDITIONS
15
Figure 9. Bus serviceTransit Service
There is no bus service within the Study Area
itself. Two MBTA routes, 455 and 459, operate
along Loring Avenue and Lafayette Street. The 450
connects to Haymarket Station in downtown Boston
and the 455 travels to Wonderland Station in
Revere. In addition, the 459 travels from downtown
Salem to Logan International Airport in East Boston
via Lynn. Other routes connecting to the existing
Salem Station include the 451 (connecting to north
Beverly) and the 456 (connecting to Lynn). While
the presence of several bus lines proximate to the
Study Area is an asset, these are not a replacement
for rail service. These bus lines generally serve
people traveling shorter distances, rather than
act as a viable commuter option to Boston. For
example, the 450 bus to Salem is scheduled to
take at least an hour to Haymarket, not including
the uncertainties of traffic. This contrasts with a 37
minute scheduled ride to downtown Boston on the
commuter rail.
SSU currently operates a shuttle between the
campus and the commuter rail station that runs
approximately every 40 to 60 minutes, operating
on a loop with one direction on Lafayette Street and
the other along Canal Street. The University also
operates another shuttle circulating the campus.5
5 www.salemstate.edu/maps/bus_campus.php
16
EXISTING CONDITIONS
ZONING AND LAND USE
Understanding the City’s zoning is a critical
component to assessing the Study Area’s ability
to achieve its growth potential. The Study Area is
comprised of a mix of commercial and industrial
zoning districts (Figure 10). There are 88 parcels
over 96 acres in the Study Area divided into four
zoning districts.
Several uses are allowed in all districts comprising
the Study Area. These include:
»Bank/financial agencies, business/
professional offices, retail stores (excluding
department stores), medical and dental
offices, restaurants (no alcohol), childcare
facilities, educational, and production/sale of
produce by right; and,
»Medical clinic, essential services (provided by
public service corporation or governmental
agencies) by Special Permit through the
Zoning Board of Appeals (ZBA).
Other than the Central Development district,
residential uses are prohibited throughout the
Study Area. The following provides additional
information on each of the districts.
Central Development (B5)
The northernmost parcels on the site are zoned
Central Development, which is the City’s downtown,
mixed-use district. As noted above, this district
allows for residential uses by right, including single
family and multifamily. It also allows mixed-use
residential above retail by right. For commercial,
additional by right uses not listed above include
restaurants with alcohol, art studios, personal
service establishments, and retail-wholesale supply
establishments. There are also uses allowed
through special permit, either through the ZBA or
Planning Board (PB), including adult day care (ZBA)
and fast food (PB).
Funeral homes, general service establishments,
motor vehicle repairs/sales/rentals, retail
department stores, supermarket, and plumbing/
carpentry stores are prohibited.
Wholesale and Automotive (B4)
Running along the east side of Canal Street down
to Laurel Street (adjacent to Crosby’s Market
Place), is the Business Wholesale and Automotive
district. This district allows general service
establishments, motor vehicle service, personal
service establishments, plumbing/carpentry/sheet
metal shops, and sale/storage of building supplies.
In addition, it allows numerous uses by Special
Permit:
»ZBA: adult day care, animal clinic/kennel,
arts and crafts studios, and hotel
»PB: fast food drive-through, other drive-
through, wind energy (residential scale)
Restaurants with alcohol, bed and breakfasts, non-
exempt educational uses, supermarkets, and retail-
wholesale supply establishments are prohibited.
Industrial (I)
The largest portion of the site is zoned Industrial,
including along Canal Street west and south of the
Wholesale and Automotive district, and the area
east of Jefferson Avenue. This district allows motor
vehicle service and rental, building supply storage
and sale, food and beverage manufacturing, food
and beverage manufacturing, and junkyards. By
Planning Board Special Permit, it also allows
manufacturing (including light), assembly or
packaging, and mini storage warehouse facility.
Business Highway (B2)
Located at the southern end of the Study Area,
this district allows general service establishments,
hotels, restaurants with alcohol, retail department
store, and supermarket by right. Uses allowed by
Special Permit include:
»ZBA: adult day care, animal clinic / kennel,
bed and breakfast, indoor or outdoor
commercial recreation, funeral home,
motor vehicle body repair, motor vehicle
service and rental, and personal service
establishment
»PB: fast food drive-through, other drive
through, wind energy (residential scale)
In addition, by Special Permit a Planned Unit
Development (PUD) is allowed in all districts. For a
PUD, the parcel must contain 60,000 square feet
or be five times the minimum lot size requirement
for the zoning difference (whichever is smaller).
17
Highway Business Wholesale + Automotive Central DevelopmentIndustrial
Figure 10. Study Area Zoning
18
EXISTING CONDITIONS
Dimensional Standards
The dimensional standards vary across the
districts, resulting in a range of building typologies.
Table 1 summarizes the four districts and the
accompanying diagrams illustrate generic
parcels and building envelopes. The B5 Central
Development is the most distinguished among
the districts with a separate section in the zoning
ordinance to explain its unique characteristics. In
particular, B5 has different standards depending
on whether the building is new or existing. It is also
the only district to specify a Floor Area Ratio (FAR).
Perhaps surprisingly, the maximum lot coverage
for new buildings in B5 is lower than that of the
Business Wholesale and Automotive district and
only slightly higher than the Industrial district.
Table 1. City of Salem, Dimensional Standards
19
Figure 13. B2 Business HighwayFigure 12. B4 Wholesale + Automotive
Figure 15. B5 Central Development (Existing Building)
Figure 11. Industrial Zone
Diagrams of Study Area Zoning District Dimensional Standards
Figure 14. B5 Central Development (New Building)
20
Parking Requirements
Parking is a critical component to transit-oriented
development and can be an asset or a hindrance
to the success of a future neighborhood. Requiring
excessive parking can raise development costs and
detract from the creation of a walkable, vibrant
neighborhood.
The parking requirements in Salem vary by use.
Residential uses are measured on a per unit basis
and other uses are based on a variety of measures,
including square footage and number of employees.
As with dimensional standards, the Central
Development district has its own set of standards.
Table 2 provides the parking requirements by use,
including those requirements specifically for the
Central Development.
The prototypical lot coverage examples above do
not take into account parking requirements. In
many instances, the actual maximum building
EXISTING CONDITIONS
size will be further reduced from the dimensional
standards due to parking requirements. Consider a
generic example of a retail building in the Highway
Business District (Figure 16). In addition to the
required dimensions and minimum lot size for this
building, parking requirements are 1 space per 150
square feet. On a 12,000 square foot parcel the
maximum building parcel based upon dimensional
standards is a 2 story, 5,900 square foot building.
Assuming gross area for a parking space (i.e.,
including aisles and turning) is 420 square feet,
this maximum building space would be reduced
to 3,600 square feet, a 38% reduction in building.
This reduces lot coverage from a theoretical
maximum of 25% to 15%. Although this is a
simplified example that doesn’t take into account
various factors that would be present on individual
parcels (e.g., the shape of the parcel, the potential
for a variance, etc.), it illustrates the tremendous
effect parking can have on the built environment.
21
Table 2. City of Salem, Parking Requirements
Figure 16. Example of how parking requirements could reduce
the available built area on a parcel in the Highway Business
District.
22
EXISTING CONDITIONS
Land Use
The existing land uses in the Study Area reflect in
large part the established zoning districts. Large
swaths of land west of Jefferson Avenue are labeled
“Other,” which includes municipal uses such as the
Police Station and Department of Public Works, an
MBTA-owned parcel, a utility company’s parcel, and
vacant lots.
Table 3 summarizes the total building by use. The
vast majority of commercial space is comprised
Commercial Industrial Residential Other
Figure 17. Study Area Zoning
Table 3: Existing Land Use Summaryof retail uses. The majority of these retail uses
fall within the broad category of service oriented
/ convenience goods (as opposed to shoppers
goods). There are 57 housing units within the
district, most of which are clustered in multifamily
buildings on the north end of the site (part of the
Central Development).
23
Figure 18. Selection of Study Area photos
24
KEY STAKEHOLDERS
Salem State University
Salem State University (SSU), located adjacent
to the Study Area, has a critical interest in
construction of a future commuter rail station.
This four-year public university, one of the largest
state universities in Massachusetts (approximately
9,000 students), resides on more than 107 acres
to the southeast of the proposed station. The
university is committed to acting as an exemplar of
sustainable development among state institutions
of higher learning, pledging to eliminate its
contribution to climate change over time. As part
of these efforts, SSU engages in active efforts to
reduce traffic congestion and improve air quality
by reducing the number of single occupancy
vehicle trips to and from the university. SSU
employs approximately 1,550 full time equivalents
(FTEs). SSU also has more than 6,900 commuting
students, representing about 60% of its total
student population. While its goal is to ultimately
house half of its student population on campus, the
school will continue to operate in large part as a
commuter school.
As part of its 2015 Rideshare Regulation Annual
Update Report (required by Massachusetts
Department of Environmental Protection), SSU
performed a survey of commuter mode choices.
Based upon this statistically significant sample,
56% of applicable commuters travel daily to
campus in a single occupancy vehicle. Figure 19
provides a breakdown of mode choice.
SSU provides a comprehensive commuting program
for its commuters, including web-based “ride-
matching,” preferential parking for carpools, bicycle
incentives, discounted transit passes, and a shuttle
service to Salem Depot station. These measures
are estimated to have reduced Drive Alone
Commuter Trips (DACT) from a 2007 base year by
2,500. Achieving further reductions, however, may
be a challenge. The shuttle service, for example,
has been a challenge due to traffic and schedule.
As such, SSU considers the construction of a new
commuter rail station proximate to its campus
as one of the most important City endeavors
over the next decade and key to its growth in a
sustainable way. The University’s largest source
of students comes from Lynn (795), which is along
the same rail line as Salem. Other significant
student populations along the commuter rail line
include Beverly (351) and Gloucester (236). A
transit station closer to campus could potentially
capture a greater number of students along this
line. It would also allow for better collaboration with
other community colleges, such as North Shore
Community College.
Figure 19. Salem State University Commuter Transportation
Survey, Commute Mode (2015)
EXISTING CONDITIONS
25
Figure 20. North Shore Medical Center Commuter
Transportation Survey, Commute Mode (2016)North Shore Medical Center
The other key stakeholder near the study area is
North Shore Medical Center (NSMC). Among NSMC’s
several campuses, its Salem location is the largest
and is the only medical center on the north shore to
offer inpatient services. NSMC is a major employer
with 5,000 total employees (3,500 FTEs) spread
across its campuses.
Furthermore, it is currently undergoing a $200 million
expansion to accommodate additional services and
operations from NSMC Union Hospital in Lynn, which
is closing operations. This expansion includes a new
three story building, renovating the former Spaulding
Rehabilitation Hospital, and creating a new lobby.
There will be a new emergency department and the
Spaulding building will be turned into a mental health
center. This move will cement the campus as the hub
for NSMC’s operations.
NSMC conducts an annual transportation survey
for its employees. Among the 800+ respondents,
approximately 90% of employees drive alone to
the hospital. (See Figure 20.) Among those, 245
respondents (29%) stated that one of the reasons
they drive alone is due to transit schedules / routes
not working for them. NSMC, therefore, believes that
an additional commuter rail station near the hospital
would induce additional employees to take transit.
Furthermore, as patients bear increasing costs there
is the potential to draw a greater number of reverse
commuters from locations with higher priced medical
services, such as Boston. The hospital runs regular
shuttles from its various parking lots and would
strongly consider adding an additional pick-up / drop-
off location at the station itself.
26
EXISTING CONDITIONS
PUBLIC HEALTH
Research suggests that roughly 60% of our
health is determined by social, environmental
and behavioral factors shaped by the context
in which we live.6 By altering our physical and
social environments, urban development play an
important role in determining health of residents
a community. So, as the South Salem area is
considered for changes, it is an opportunity to
mitigate issues that pose a health risk and enhance
elements that benefit health – physical, social, and
mental – in the city.
A framework for considering the health
impacts of TOD and traditional neighborhood
developments was developed as part of the Healthy
Neighborhoods Equity Fund (HNEF) Health Impact
Assessment (HIA). The HNEF HIA identified a set
pathways that characterize how neighborhood
changes could affect the health of a community.
Identified through a combination of stakeholder
input and current public health research, these
pathways highlight factors that influence physical
and mental health, including social elements such
as crime, social cohesion, neighborhood walkability,
air quality, and safety from traffic.
A subset of the HNEF HIA pathways are included
(Table 4) for the South Salem project given the
context of the Study Area and the development
scenarios under consideration. The Health
Determinants column identifies the pathway and
associated health issues. Where available, data is
presented in the following section (Salem’s Health
Status) to document the current health of residents
and identify what conditions could be improved,
or at risk, as result of changes in the South Salem
study area.
6 Twenty percent of one’s health is attributed to healthcare and 20% is genetics.
7 The HNEF Health Impact Assessment HIA was developed by the Metropolitan Area Planning Council (MAPC), the MA Department
of Public Health, and the Conservation Law Foundation (CLF) and incorporated stakeholder engagement and guidance, multiple
health and non-health datasets, and research from the planning and public health fields. For detailed source data and additional
information, please visit http://www.mapc.org/hnef
Table 4. South Salem Public Health Indicators
27
Table 4. South Salem Public Health Indicators (continued)
28
Table 4. South Salem Public Health Indicators (continued)
EXISTING CONDITIONS
29
Salem’s Health Status
Measuring and identifying the health of the
population in Salem allows for an understanding
how current residents are faring and what factors
might be at play to promote wellness or to pose
health risks. The data also provides focus for
planning and policy interventions maximize health
and wellbeing across the lifespan in the city. This
review includes key health indicators and the social
and environmental factors that may promote, or
inhibit, healthier outcomes for current and future
residents of the South Salem project area.
Mortality
Premature mortality measures the proportion of
residents that die before average life expectancy
would predict predict (i.e., deaths occurring before
the age of 75). This indicator allows us to focus on
deaths that could have been prevented and what
groups, if any, may be experiencing a greater health
burden than others.. This indicator allows us to
estimate in a basic and crude term whether Salem
residents are passing away at disproportionately
young ages, or vice versa. Figure 21 suggests that
Salem has a premature mortality rate similar to
that of the State and MAPC region, and that the
white population has the highest estimated rate in
the City (although it is not statistically significant).
Similar to mortality, hospitalization rates can
serve as an indicator of current health of Salem
residents, particularly those that may be severe and
forcing residents to seek immediate care.
Figure 21. Salem Premature Mortality Rates Per 10,000 People, 2008-2012
30
EXISTING CONDITIONS
Health Indicators and Risk Factors
Cardiovascular disease, cancer, and hypertension
are among the highest contributors to premature
mortality and disease prevalence in the United
States. As the estimates in Table 5 show,
hospitalization rates in Salem are similar to that
of the Commonwealth and MAPC region, with one
exception and several health disparities. The
residents of Salem have a statistically significant
higher asthma hospitalization rate than the State
and black residents statistically significant higher
hospitalization rates for asthma, diabetes, and
heart failure when compared to the city, region, and
state. Residents of Asian and Pacific Island descent
have statistically significant higher hospitalization
rates for heart failure and Latino residents have
statistically significant higher hospitalization rates
for hypertension.
Other health conditions and risk factors that are
major contributors to the domestic burden of
disease are obesity, prediabetes, physical activity,
smoking, and consumption of healthy foods.
According to measures from the state, Salem is
among the municipalities with residents who are
the least healthy when compared to the State. The
City does worse than the other cities and towns
regarding prediabetes prevalence, residents having
any exercise in their day, the prevalence of obesity,
smoking, and fruit and vegetable consumption.
Additionally, Salem residents report more poor
mental health days than residents of other
municipalities and experience higher numbers of
mental health emergency department admissions
when compared to the state.
Table 5. Hospitalization Rates Per 100,000 People
31
strategies that increase physical activity and
healthy eating among residents. The purpose of this
work is address the root causes of chronic diseases
and change behaviors that put people at risk for
chronic diseases.
Although this work is underway, changes, and
their ripple effects, can be slow to take shape. For
example, it took 30 years for the nation to go from
having only two states with obesity rates above 20
percent to now having no state with a rate lower
that 20 percent. Reversing that trend will take time
and that is why continued work to affect housing,
economic opportunity, transportation, and natural
resources must consider the potential for health
improvements. Changes considered for South
Salem have the potential to affect current residents
by increasing economic opportunities and reducing
harmful exposures. As a result, the City can expect
to see improved health behaviors and outcomes
over time and a more prosperous, vibrant, and
socially connected city.
Health of Older and Younger Residents
Younger and older members of a community may
experience health issues differently than other
residents. In the case of Salem, limited health
data is publicly available for youth. One data point,
pediatric asthma prevalence, is available from the
State and it indicates that Salem youth are among
the healthiest in the state.
For older adults in Salem, their health behaviors
and risk factors are in the line with the State’s,
performing worse only in regard to asthma.
Health Disparities and Outcomes
Differences, or disparities, in health conditions
and behaviors have roots in the social, political,
and environmental context in people live. In
particular, those who face economic limitations
and experience racial bias or other forms of
discrimination encounter additional barriers that
hold them back from achieving better health
outcomes. Health disparities between Salem
and the Commonwealth (e.g., higher asthma
hospitalization rates) and differences within Salem
(e.g., higher asthma hospitalization rates among
black residents) likely have roots in these contexts,
limitations, and lived experiences.
In Salem, work has been underway to change
social, political, and environmental factors. The
city is engaged in proactive and collaborative
community-based planning. Examples of this
include plans and ongoing processes in the Point
Neighborhood and the Derby Neighborhood.
Salem is also home to one of the state’s Mass in
Motion programs. The program works implements
32
33
MARKET STUDY CONTEXT
MAPC staff conducted a market analysis of the current South Salem Study Area
and estimated how a new South Salem commuter rail station could potentially
change the market conditions. MAPC staff looked specifically at the market
potential for residential, retail, and office uses. This information can help to
inform future planning decisions and development opportunities.
Achieving the full potential without a station requires planning and
improvements, focusing on the impact that the future rail trail (under
construction) could have on an area. This type of development, described in the
following chapter, is often known as Trail-Oriented Development (TrOD).
In the TrOD scenario MAPC estimates that the market can support a potential
15,000 additional square feet of retail and 200-400 additional residential units
in the South Salem Study Area. With the addition of a South Salem Commuter
Rail station, MAPC estimates that the market could support an additional
22,000-26,000 square feet of retail and 900-1,100 additional residential units.
The analysis demonstrates the strong impact that a new commuter rail station
can have on market demand. MARKET ANALYSIS
34
MARKET ANALYSIS
train station and help to support additional retail in
the area.
Interviews
Local stakeholders have invaluable insight into
how market forces play out on the ground. MAPC
conducted numerous interviews to gather the local
perspective and to help contextualize the data and
market trends that inform this analysis. In addition
to talking with business owners, developers,
property owners, and brokers, MAPC met with SSU
and NSMC to understand their future expansion
plans.
Opportunities and Challenges
The majority of interviewees felt that there was
a strong opportunity to redevelop this area with
the addition of the station and that there may be
some more limited opportunities to redevelop
certain portions of the Study Area as it is now.
The Study Area as it is now has a heavy industrial
feel with a number of auto-oriented businesses
including auto parts stores, auto dealerships, and
gas stations. The area is also not very pedestrian
friendly with long blocks, numerous parking lots
that break up street frontage, and wide driveways
for many businesses. At this point in time it is not
a particularly attractive area for retail or residential
development, and there are many other areas in
Salem where this type of development is more likely
to occur. These areas include the Downtown, the
Point neighborhood, and along Bridge Street. Most
interviewees thought that the overall development
opportunity in the Study Area as it is now is limited.
Some sites at the northern end of the Study Area
closer to the downtown and the existing station may
have potential for redevelopment. Improvements
to the area, e.g., capitalizing on the potential of
the rail trail, could improve development prospects
further to the south. However, many of the
interviewees commented that with a new station,
the development potential of the area would be
dramatically increased.
In regards to the residential market, people
mentioned that Salem was becoming a more and
more popular place for people to live. The City
is particularly attractive to people looking for a
more affordable urban experience in a community
that is relatively close to Boston. In recent years,
a number of market rate rentals have been
permitted and built in Salem and rental rates are
continuing to rise across the City even in some
of the more traditionally affordable areas. (See
Neighborhood Change chapter for additional details
on the effects of growth.) One property owner who
owns one of the northern parcels was interested
in potentially redeveloping his site. However,
multiple developers stated that the addition of the
station would be important for them to consider
building in South Salem. One developer stated
the importance of an easy and attractive ten
minute walk to a train station to their residential
development model. A new station in South Salem
would allow them to command the rents needed to
make a new project in the area financially feasible.
At this point in time, there are opportunities in
other areas for affordable land that are in better
geographic locations. It is also worth noting that
businesses were generally supportive of new
residential development and felt that it would be
beneficial in increasing their customer base.
Recent and Planned Investment
Recent and planned investment in and around
the Study Area provides some context for the
market opportunities as they exist today. The data
indicates limited permitting activity in the Study
Area with only one major project occurring on its
periphery and one smaller project permitted within
the boundary. These projects include a large
mixed-use development at Washington and Dodge
Street, just north of the South Salem site. The
project will include upwards of 60 residential units
along with a hotel and some commercial space.
The exact number of residential units is still under
review. Within South Salem, 95 Canal Street is
a recently permitted multi-family project which
will include 8 units. There are no other recently
permitted projects in the Study Area.
It is important to note that Salem State University
and North Shore Medical Center, as two major
institutions in the area, could help to guide growth
in the Study Area. For example, any new students
or employees that are associated with expansions
of either of these organizations have the potential
to dramatically affect the market, particularly the
demand for housing or additional retail.
Additional students could help to increase the
demand for a station in this area and conversely
a train station would certainly help to support a
University expansion. More students living in
the area may provide the potential to support
more retail establishments as well. SSU also
employs approximately 1,550 employees in
Salem. Additional students would also likely mean
additional employees who could also utilize the
35
For retail potential, interviewees reinforced that any
new retailers that offer shoppers’ goods were more
likely to locate in downtown than in South Salem.
They would benefit from the foot traffic downtown
as well as the other unique destinations that draw
people to downtown Salem. South Salem might
attract more service retail including banks, limited
service restaurants, or liquor stores that would
generally require more parking. Shop owners in the
area said that they draw customers from not only
South Salem, but also Marblehead and Peabody.
A station could potentially change this environment
if it draws the kind of dense residential
development that could allow more destination/
shoppers good retail to be supported by foot
traffic. There are some opportunities in the area
that would serve future retailers well including the
fact that there is good visibility along Canal Street
for retail tenants and that the proximity of the
university helps to bring customers to support retail
stores. NSMC commented that there are limited
lunch places in the area where employees can grab
food and that there may be potential for more of
these establishments in the area even now. Other
retail that caters to the needs of the hospital might
make sense here as well.
For office development, multiple interviewees
felt that there is already ample office space near
the area with prime waterfront space available
at affordable rates within Shetland Park and that
there was very limited opportunity to introduce
new office development in this area. The station
alone is unlikely to create a new market for office
development. However if the area transforms
first through additional residential and retail
development, there could be potential for a build to
suit office development at a later point in time.
Although most interviewees were supportive of the
new station and the new investment that it might
attract in the area, it is also important to note that
some of the business owners did express concerns
about parking and particularly commuters who
might park all day and take spaces that customers
might otherwise use. On the other hand some
businesses thought that a station would help to
alleviate some traffic along Canal Street, assuming
that more students and NSMC patients (coming
in for outpatient services) might commute by train
rather than car.
Demographics
Understanding the current and projected
demographic and socio-economic characteristics
of a community and its region is important in
order to adequately understand the market
opportunities. An area’s households are key
drivers that determine the market potential for
housing and retail and the community’s economic
competitiveness within the region.
Population
Population in Salem grew by about 4% between
2010 and 2015. This growth is on par with
population growth experienced in surrounding
communities. During this time period, the City of
Salem added about 1,500 people.
Table 6. Population Change, 2010-2015, Salem and Surrounding Communities
(Source: ACS 2015 5 Year Estimate, US Census 2010)
36
Age Profile
Between 2010 and 2015, Salem has seen the
highest percentage population growth in individuals
age 20 to 34, adding just over 1,000 individuals
in this age cohort. Other growing age cohorts in
Salem include individuals age 55 to 64 and 65
plus.
The median age in Salem has stayed at about
36 years old, suggesting that much of the growth
that occurred within the 20 to 34 age group may
be near the high end of the age range. When
compared with surrounding communities, Salem is
quite young. Only the City of Lynn has a younger
population with a median age of 33.
Households
For the housing market analysis, understanding
the household composition and trends is even
more critical than overall population figures.
Understanding household change and growth gives
a clearer picture of what the future demand for
additional units may be.
When compared with surrounding communities,
Salem is one of only three communities that
experienced growth in their number of households
between 2010 and 2015. During this time period,
Salem added 187 households (1% growth). This
is more than all except Peabody (+339 units) and
MARKET ANALYSIS
Beverly (+263 units). Interestingly, the average
household size of each of the communities
that added more households also shrunk. As
household sizes shrink, more units are needed to
accommodate the same number of people.
MAPC projects that this household growth is likely
to continue in Salem with the City adding 2,644
units between 2010 and 2030 (15% growth).
Salem’s projected percentage growth rate is lower
than that of Lynn, Peabody, and Danvers. However,
as discussed in more detail later in this analysis,
Salem has been permitting (or supplying) housing
at a faster rate than these communities and may
actually be capturing some of the demand originally
projected for other communities.
The households that are projected to grow by both
the largest number and percentage in Salem are
those 65 and older, which is consistent with the
general aging of the region. Notably, Salem is also
expected to see an 8% increase in households age
20 to 34 which would continue the growth trend
for this age cohort experienced between 2010
and 2015. These two age groups in particular
(millennials and retiring boomers) often have
similar housing preferences and are looking
for walkable environments with easy access to
amenities and transportation options.
37
Table 7. Population Change, 2010-2015, Salem and Surrounding Communities
(Source: ACS 2015 5 Year Estimate, US Census 2010)
Table 10. Household Change: Salem and Surrounding Communities, 2010-2015
(Source: ACS 2015 5 Year Estimate, US Census 2010)
Table 8. Population by Age over Time: Salem 2010-2015
(Source: ACS 2015 5 Year Estimate, US Census 2010)
Table 11. Household Change: Projected 2010-2030, Salem & Surrounding Communities
(Source: US Census 2010 and MAPC (Stronger Region projections))
Table 12. Households by Age: Projected Change 2010 to 2030, Salem
(Source: US Census 2010 and MAPC (Stronger Region projections))
Table 9. Median Age Over Time: Salem and Surrounding Communities, 2010-2015
(Source: ACS 2015 5 Year Estimate, US Census 2010)
38
Family and Non-Family Households
About 55% of Salem’s households are family
households and 36% are households with kids.
There is also a substantial amount of non-family
households that are living alone (6,441) and
particularly households with one or more people
65 and older (4,149). This older population, along
with single individuals and married couples without
children, are likely to be interested in smaller units.
Income
Salem’s median income is $60,690. When
comparing this with the median income in 2010
(adjusted to 2015 dollars) it is actually lower and
down by about 1%. Compared with surrounding
communities, only Beverly and Lynn saw their
median income rise, after adjusting for inflation.
The median income in Salem is also low compared
with the majority of surrounding communities.
These are important trends to consider as new
investment and market opportunity opens up within
the City. It will be critical for the City to put policies
in place that ensure that low income populations
are not priced out and able to benefit from any new
investment. Low income populations in particular
may be vulnerable to any gentrification associated
with new development.
It is also important to note that although the
median income is lower in Salem, many residents/
commuters from more affluent communities
(e.g., Marblehead, Swampscott) likely travel
through Salem and offer an opportunity to capture
spending, particularly on retail goods.
In addition, when looking at household incomes by
age of the householder, those age 25 to 44 earn a
MARKET ANALYSIS
Table 13. Households by Type, Salem 2015 (Source: ACS 2015 5 Year Estimate)
Table 14. Household Income by Age (Source: ACS 2015 5 Year Estimate)
*
The breakdown of Family households (married-couple family, single parent, households with kids) does
not sum to 9,901 because of overlap among the sub-categories.
39
median household income of $71,497, indicating
that certain age groups may have more disposable
income available to support local retailers and
businesses.
Educational Attainment
Salem’s educational attainment levels are similar
to those of Essex County and the State. About
24% of the population 25 plus in Salem have a
bachelor’s degree compared with 22% in Essex
County and 23% in the state. Salem has a slightly
smaller percentage of people with a graduate or
professional degree than the county or the State.
Graduate and professional degrees can often lead
to higher incomes.
Table 15. Household Income (Adjusted to 2015 dollars) (Source: ACS 2015 5 Year Estimate)
Table 16. Household Income by Age (Source: ACS 2015 5 Year Estimate)
40
MARKET ANALYSIS
RESIDENTIAL MARKET ANALYSIS
Existing Housing Stock
Housing Units by Type
The South Salem Study Area currently has very
little housing, comprising 2% of the existing
land use. However, directly adjacent to the Study
Area to both the east and the west are residential
neighborhoods. The majority of the neighborhood
to the east consists of single family, two families,
and 3-4 unit structures.8 The neighborhood to the
west has a similar make up. The northern end of
the Study Area is directly adjacent to the Downtown
where the scale of residential housing is denser
and includes more units.
Table 17 summarizes housing trends to give us a
sense of the current market demand in the City of
Salem overall.
Salem overall has significantly less single family
housing stock when compared with the County and
the state. The City has a much higher percentage
of units within 3-4 unit structures as well as a
higher percentage of units within structures with 20
units or more. The majority of units within Salem
are in multi-family structures as opposed to single
family. The Study Area could likely support some
additional multi-family development. The northern
parcels in the Study Area would be best suited to
this type of development since they are walkable to
the downtown as well as to the existing commuter
rail station. Implementing the recommendations
associated with the TrOD development scenario
could unlock development potential in the southern
portion of the Study Area.
Housing Units by Age
Table 18 summarizes single family and multi-
family units listed by year built. The majority of
multi-family units were built in Salem prior to 1939
and just over 37% of single family homes were
built prior to 1939. Housing development has
picked up in recent years in Salem, and there are a
number of units in the pipeline for Salem with over
380 units (347 multi-family and 33 single family
units) permitted since 2014.
Housing Tenure
As illustrated in Table 19, about 52% of units in
Salem are renter occupied which represents a shift
in the market from 2010 when only 49% of units
in Salem were renter occupied. Salem is now a
majority renter market. In the past five years, the
total number of renters has grown by about 1,106
or about 6%.
Figure 23 also demonstrates growth across renters
of all ages. Renters age 55-64 have grown by the
highest percentage and are up from 13% of renter
households in 2010 to 17% of renter households
in 2015 (494 households). Demand for rentals is
poised to continue and based on historical growth,
there will likely be growing demand amongst people
age 35-54 and 55-64.
A large share of renters in Salem are fairly new to
the City with 51% moving in 2010 or later. (See
Table 20.) Although renters are generally more
mobile, the growing popularity of the City, along
with more modern rental units that have become
available, may account for the number of renters
who have recently moved in.
8 Census Tract 2041.01
41
Table 17. Number of Units in Structure (Source: ACS 2015 5 Year Estimate)
Figure 22. Housing by Year Built, Salem (Source: ACS 2015 5 Year Estimate)
Figure 23. Rental Households by Age, Salem (Source: ACS 2015 5 Year Estimate)
Table 18. Housing by Type and Year Built (Source: ACS 2015 5 Year Estimate)
Table 19. Housing by Type and Year Built (Source: ACS 2015 5 Year Estimate)
Table 20. Housing by Type and Year Built (Source: ACS 2015 5 Year Estimate)
42
Household Unit Demand by Age
Cohort
Figure 24 shows housing unit demand in Salem
by age group in 2010. Households headed by
those age 15-24 (currently 22-31 years old) are
demanding a significant amount of multi-family
rentals and multi-family ownership opportunities.
Some of this demand will be met by other age
cohorts that put this type of housing back on the
market. For example, households age 35-54 year
olds (now 42-61) free up a significant amount of
multi-family rentals and demand more single family
housing. However, not all of the demand for multi-
family units will be met, indicating the need for
more multi-family units overall.
Overall between 2010 and 2020, there is a
projected demand for 1,181 multi-family and 207
single family new units in Salem. Some of this
demand is already being met by projects that have
been permitted and built in Salem, but there is still
significant demand for additional multi-family units
in the City.
MARKET ANALYSIS
Figure 24. Household Unit Demand Change by Age Cohort (Source: MAPC Stronger Region Projections
43
Housing Preferences
ESRI Business Analyst does a tapestry
segmentation analysis, which classifies residential
neighborhoods in the US into 67 unique segments
based on demographic and socioeconomic
characteristics. This analysis provides some
insight into customer’s lifestyle choices, what they
purchase, and what they enjoy doing outside of
work. Within a half mile of the proposed station
in South Salem the population breaks down into
the tapestry segments illustrated in Figure 25.
“Trendsetters” make up 31.8% of the population
within a half mile ring of the station. “Set to
Impress” is 22.3% and “Emerald City” is about
12%.
Table 21 provides a summary of some general
characteristics associated with the top three
tapestry segments found within a half mile of the
proposed South Salem commuter rail station.
These neighborhood trends suggest that rentals
at high price points will likely be constructed as
the market picks up. This will help to attract
investment to the area, but also suggests the need
for City policies to ensure that affordable rentals
are part of any new housing mix as well.
Figure 25. Salem Tapestry Segmentation (Source: ESRI Business Analyst)
Table 21. Description of Housing Preferences by Tapestry Segment (Source ESRI Business Analyst)
44
Housing Sales & Pricing
Transaction information from the Warren Group
shows that the number of sales has picked up
considerably in the last few years post-recession
and has now exceeded the peak number reached
previously in 2005. Although condo sales have not
yet reached their 2005 peak, they have steadily
increased since 2008. Since 2008, the number of
condo sales are up by 80%. (See Figure 26.)
When looking at inflation adjusted dollars, median
sales prices have not yet reached the peaks of
2005. However, they have increased significantly
in recent years. The median sales price for a single
family home has risen over $80,000 since 2012
and condo prices are up 9% since 2012. (See
Figure 27.)
Even though condo prices are significantly lower
than pre-peak prices (-17%), when looking at
recent sales within developments built in the last
ten years, higher sales prices are noted. The
lower median sales price overall may be related
to age and quality of stock of condos in the City.
As shown in the Table 22, newer condominiums,
particularly those with amenities (e.g., in unit
laundry, concierge, garage parking) are selling
from $300,000 up to $449,000. For example,
recent 2 bedroom condo sales at Derby Street
Lofts have sold for over $400,000. Many of these
recent sales are also in or near the downtown area,
suggesting that a condo in an amenity rich area
near transit can command a higher price.
As of June 7, 2017, there were 24 postings of
condos for sale in Salem, 5 single family homes,
and over 50 rentals posted on Zillow. That is a
fairly limited amount of for sale opportunities.
MARKET ANALYSIS
Figure 26. Salem Home Sales (Volume) (Source: Warren Group, 2016)Figure 27. Median Sales Prices (Source: Warren Group, 2016)
Note: sales prices are adjusted to 2016 dollars.
45
Table 22. Recently Sold Condominiums, Salem (Source: Zillow and Redfin May-August 2017)
Figure 28. Salem Building Permits by Type (Source: City of Salem)
Building permit has picked up significantly in Salem
in recent years, however. Since 2010, Salem has
permitted 620 multi-family units and 51 single
family units (see Figure 28). The multi-family units
will consist of a mix of rentals and condominiums.
Developers of newer multi-family units in Salem
have had success in attracting the growing 20-34
year old population as well as couples age 50 plus
in both the rental and for sale market, suggesting
that there is market demand for these types of
units within these age cohorts.
46
Rental Market Characteristics
As is displayed in the Table 23, compared to Essex
County, a greater percentage of renter households
in Salem are younger. Twenty-seven percent of
households are age 25-34 in Salem versus only
21% in Essex County. Salem has seen renter
households age 55-64 grow as a percentage of the
City’s population between 2010 and 2015 and has
seen renter households age 65 plus decrease as a
percentage of the City’s overall population.
As is displayed in the Figure 29, the age cohort
of renter households that has grown by the
highest percentage in Salem are 55-64 year
olds. The 55-64 age cohort has grown 45% or by
494 households between 2010 and 2015. The
group that makes up the highest percentage of
renter households in Salem is age 35-54. These
households grew by about 454 households
between 2010 and 2015.
As stated earlier, a large percentage of renters in
Salem are fairly new to the City with 51% moving
in 2010 or later. (See Table 24.) Although renters
are generally more mobile, the growing popularity
of the City along with more modern rental units that
have become available may account for the number
of renters who have recently moved in.
MARKET ANALYSIS
Table 23. Age of Renter Households (Source: ACS 2015 5 Year Estimate)
Figure 29. Salem Renter Households by Age (Source: ACS 2015 5 Year Estimate Census 2010)
Table 24. Renter Household Length of Stay (Source: ACS 2015 5 Year Estimate)
47
Figure 30. Monthly Asking Rent, Salem (Source: Zillow 2016)
Table 25. Recent Rental Listings, Salem (Source: Zillow 2017)
Rental Units
The population of renters is growing within the City
and rental units seem to be in high demand. As
Figure 30 illustrates, between 2010 and 2015, the
average monthly asking rent rose from $1,481 to
$1,875 which reflects a 27% increase.
Table 25 provides a sample of recent rental listings
within developments throughout Salem. Most of
these developments include ample amenities, and
those that are closer to the existing commuter rail
station and downtown are commanding higher
rents, particularly compared with the average
monthly asking rent above.
48
Recent Development and Pipeline
Projects
As noted previously, there is significant permitting
activity that has occurred within the City of Salem
for residential development in recent years. Table
26 represents mixed use and housing development
that has been permitted in the City of Salem since
2010. (Note this list is limited to Planning Board
Permits, and is, therefore, not inclusive of all recent
development.
Three hundred eight three total units have been
permitted in Salem since 2014. Of those 383 total
units, 350 are multi-family units and 320 of those
multi-family units are within a 15 minute walk to
the existing commuter rail station. That indicates
that 91% of multi-family units permitted since 2014
are within a 15 minute walk to the train station.
Looking at an even closer walking distance reveals
that 145 (or 42% ) of the total multi-family units
permitted since 2014 (350) are actually only a 10
minute walk. The amount of units that have been
permitted within walking distance of the existing
commuter rail station is a good indicator of the
market demand for transit-oriented residential
units.
MARKET ANALYSIS
Table 26. Recent Development, Salem (Source: City of Salem)
49
Residential Market Demand Results
Based on demographic information and housing
trends, combined with the improvements outlined
under the TrOD scenario, the market in South
Salem will likely support additional housing units,
particularly multi-family units. MAPC’s housing
demand projections suggest changing trends in
births, deaths, migration, and housing occupancy
might result in higher population growth and
greater housing demand. In order to determine
the residential demand for the South Salem Study
Area without a station, MAPC demand projections
are compared with the supply of housing recently
put on the market (2010-2014) to give us a more
accurate picture of how supply is aligning with
demand at the municipal level. Because markets
cross municipal boundaries, it is important to
look at residential supply and demand across
multiple communities. A community may actually
experience more or less market demand than
projected if surrounding communities are either
not producing enough to meet their demand or are
producing significantly more housing than demand
projections indicated.
MAPC first identified a broader focus area of
housing markets that might reasonably compete
with Salem in attracting residents. The focus area
included the communities of Beverly, Danvers,
Lynn, Marblehead, Peabody, and Swampscott.
MAPC then considered projected housing unit
demand through 2020 by combining projected
individual demand from each of these communities
by both housing type and tenure. Based on MAPC
demand projections, an estimated 8,996 units
were projected by 2020 within the focus area.
In addition to the projected demand, it is also
important to consider the supply, or the number
of units that have been permitted since 2010,
and that have begun to fulfill projected demand.
Based on available building permit data, Salem has
captured 45% of permitted multifamily units within
the focus area since 2010 and has surpassed each
of the neighboring communities in permitting this
kind of housing. This permitting activity is indicative
of a strong demand for multi-family housing
within the City. Without the South Salem Station
presenting a new TOD opportunity, it is unlikely that
the City of Salem will be able to continue to capture
(permit) multi-family development at this rate.
Using a more conservative capture rate of 20-30%,
the City can expect to support between 1,000 and
1,800 additional multi-family units across the City.
For single family housing, the City of Salem has
captured about 5% of single family permitting
within the Study Area since 2010. This is a
smaller percentage than each of the comparison
communities, except for Swampscott. If Salem can
capture a similar amount of the additional expected
demand for the Study Area through 2020, it could
likely support between 50 (2% capture) and 200
(8% capture) single family units throughout the
City. There is unlikely to be a significant amount of
single family housing constructed within the Study
Area, although there could be an opportunity for
townhouse style units.
Although there is high demand for multi-family units
city-wide, the South Salem Study Area right now
is not a particularly appealing site for this kind of
development. Certainly, there is some potential
for South Salem sites that are in close proximity to
downtown Salem. Furthermore, incorporating the
recommendations associated with TrOD scenario
can help the Study Area maximize its potential.
With this context in mind, it is likely that the Study
Area could support about 20% of the overall
projected demand for multi-family within the City
or between 200-300 multi-family units or 200-400
total units.
50
Table 27. Regional Housing Demand (Source: MAPC Projections)
Table 28. South Salem Housing Unit Demand (No Station)
MARKET ANALYSIS
51
Residential Market Demand with
Commuter Rail Station
Combined with zoning changes and better
connections to the downtown, a commuter rail
stop in South Salem has the potential to catalyze
additional residential development in the Study
Area. As noted in the current residential market
scenario, the City of Salem is currently capturing
45% of permitted multifamily units within the
identified focus area since 2010.9 In addition, 84%
of all units and 91% of multi-family units permitted
since 2014 have been within a 15 minute walk
to the Commuter Rail station, demonstrating the
market for transit oriented development. The
appeal of constructing units and living in homes
around the station was also reinforced through
interviews with local developers and brokers. The
construction of a South Salem commuter rail
station opens up a new and significant opportunity
for transit oriented development and would
particularly increase the market potential for multi-
family housing within the South Salem Study Area.
As we saw in the current scenario analysis, without
a second commuter rail station it is unlikely
that Salem could continue to maintain a 45%
capture rate of multi-family units within the focus
area. However, with the introduction of the new
South Salem station, a significant amount of new
development potential within walking distance to
a station will be unlocked. This new development
potential may allow the City overall to continue
at this more aggressive capture rate. Using 45%
as a benchmark, MAPC estimates that the City of
Salem with a new South Salem Commuter Rail
station could capture between 45-50% of the
projected demand for the focus area through 2020
or approximately 2,300-2,800 multi-family units.
The single-family market capture rate remains
unchanged from the current market scenario since
Table 29. South Salem Housing Unit Demand (with Station)
the introduction of a South Salem Commuter Rail
station is unlikely to exert a significant market
change within the single family market.
Narrowing down to the Study Area that will be
directly served by the new commuter rail station,
MAPC estimates that the Study Area could support
between 900 and 1,100 multifamily units. This
represents between 600-700 more units than
could potentially be supported by the market in the
current scenario. Understanding that 42% of the
multi-family units permitted in South Salem since
2014 were within a ten minute walk of the existing
commuter rail station, MAPC used a slightly more
conservative capture rate of 40% to estimate what
percentage of new multi-family units might be
supported by the market in the Study Area if the
station were introduced.
9 Permitting data based on 2010-2014.
52
COMMERCIAL ANALYSIS OVERVIEW
MAPC staff also looked at the commercial
development potential of the area, including
both a retail and office market assessment. In
order to understand the mix and the type of
businesses currently present in the area, MAPC
staff inventoried existing businesses. Figure 31
represents the existing business mix by number of
establishments.
The majority of retail in the area is service
oriented or convenience goods. Other services
establishments make up 29% of existing
businesses. This category includes a number auto
oriented uses, such as auto repair shops. Also
included in this category are personal service
establishments such as hair salons, nail salons, dry
cleaners, laundry, pet care, and massage.
Retail trade makes up 24% of existing
establishments, the majority of which is personal
service oriented or convenience goods. There are a
number of auto parts stores and auto dealerships,
convenience stores, and gas stations. The area
does not include a significant amount of shoppers
goods or unique destination retail. There are a
few full service restaurants in the area, including
Bertini’s, Minzu Sushi and Sidelines Sports Bar and
Grill. However, the majority of the restaurants are
limited service (i.e., Subway, Domino’s Pizza, Honey
Dew Donuts, etc).
There are very few establishments that fall
under Professional and Technical Services within
the Study Area. Within Health Care and Social
Assistance, there are a few small offices, including
chiropractors, a dentist, and dialysis center. There
are also a couple of establishments within the
Finance and Insurance category including some
banks and insurance companies. There is not
a significant amount of traditional office space
available within the Study Area.
Although this area has an industrial character now,
there may be limited demand for additional industry
to locate in this area because of issues with the
length of time for distribution. There are also other
industrial areas in Salem that are likely better
suited for industrial uses. For example, Salem
Commerce Park is about 180,000 square feet and
has about 10 different industrial condos. There are
also some more industrial areas along Swampscott
Road that might have better transportation access
to suit industrial needs.
MARKET ANALYSIS
Figure 31. Study Area Business Inventory
53
RETAIL DEMAND ANALYSIS
Trade Area
In order to estimate the amount of additional retail that
South Salem can support, it is important to first identify
a trade area. The trade area is the geographic area from
which a retail establishment generates sales. There are
many factors to consider when determining a trade area
including the distance and time that people may be willing
to travel in order to reach a destination, any physical
or geographic barriers as well as regional competition.
Defining the trade area is critical because it defines the
boundaries for which data is gathered and analyzed to
identify retail opportunities.
The Study Area as it is right now would be a challenging
place for specialty retail to locate. This is due to the current
auto orientation, lack of significant foot traffic, and heavily
industrial character. South Salem is also in very close
proximity to historic downtown Salem, an attractive area for
shoppers’ goods retail that would be direct competition for
South Salem.
With this context in mind, it was determined that the
primary trade area for the South Salem Study Area would
be a five minute drive time. This trade area has minimal
overlap with Downtown Salem and it is reasonable to
assume that people would be willing to travel this distance
in order to attain goods and services. A more local trade
area of a ten minute walk time was also considered in
order to account for students and nearby residents. MAPC
staff also looked at a secondary trade area of a ten minute
drive time to understand how the market for particular
types of retail and restaurants might increase if there were
a particular reason for people to travel a further distance
to get to South Salem. Drive times and walk times are
displayed in Figure 32.
Figure 32. Walk and Drive Times, Respectively (Source: ESRI Business Analyst)
54
Retail Gap Analysis
MAPC staff analyzed ESRI Business Analyst data
within the defined trade areas in order to conduct
a retail gap analysis. A retail opportunity or gap
analysis looks at the overall demand for retail
goods and services within a designated trade area
based on the spending potential of the households
(demand), and the actual sales for those goods
and services within the market area (supply). The
difference between the demand and supply is
called the retail “gap.” If the demand exceeds the
supply, there is “leakage,” meaning that residents
must travel outside the area to purchase those
goods. In such cases, there may be an opportunity
to capture some of this spending within the market
area to support new retail investment. When there
is greater supply than demand, there is a “surplus,”
meaning consumers from outside the market area
are coming in to purchase these good and services.
In such cases, there is limited or no opportunity
for additional retail development. Thus, the retail
gap analysis provides a snapshot of potential
opportunities for retailers to locate within an area.
Table 30 provides a summary of the retail
opportunity gap analysis by industry group and
trade area. Figures in red are negative numbers
that indicate there is a surplus of sales within the
trade area. Figures in green are positive numbers
that indicate a retail gap or leakage and represent
potential opportunities for more retail in the area.
There are opportunities for new retail across a wide
range of sectors. However, it is important to keep
in mind that residents within the trade areas have
access to many different retail clusters and online
MARKET ANALYSIS
Table 30. Study Area Retail Gap Opportunity Analysis (Source: ESRI Business Analyst)
55
stores, and South Salem will have to compete in
order to draw in customers.
It is also important to note that certain sectors that
reveal large gaps, including Motor Vehicle and Parts
Dealers, are already present in abundance within
the South Salem corridor. Adding more of this type
of retail will not help to improve the walkability or
attractiveness of the area for future mixed use or
residential development. Another category that
shows a large retail gap is General Merchandise
Stores (Target, Macy’s, etc). These stores do tend
to locate along auto oriented commercial corridors,
but typically those that bring in more automobile
traffic than the South Salem corridor. Route
114 in Peabody/Danvers is an example where a
number of auto dealerships and big box retailers
are congregated along with North Shore Mall and
Liberty Tree Mall.
Potential Supportable Retail Square
Footage
MAPC staff used a conservative capture rate to
analyze the retail gap and understand the potential
for additional establishments. This capture rate
acknowledges that any single retail district will
never be able to re-capture the full amount of retail
leakage. Competition from other retail shopping
areas such as the North Shore Mall and Liberty
Tree Mall, as well as other local districts (Salem,
Beverly, Marblehead, Peabody, Danvers) and online
shopping will always draw business away from the
Study Area. When analyzing the market potential
within the local and primary trade areas, MAPC
used a 15% capture rate. When looking at market
potential within the secondary trade area, MAPC
used a lower 3% capture rate since this area will
be competing with existing retail clusters including
Salem’s downtown, the Point neighborhood as well
as Highland Avenue. Using this methodology, the
market within a ten minute walk time, five minute
drive time and ten minute drive time of the Study
Area could likely support the industries detailed
below.
It is important to note that the data below is not a
prediction for what will occur in South Salem, rather
it is an opportunity or estimate of retail space that
could be supported based on the gap analysis
figure, average sales per square foot of different
store types, average store sizes in urban-inclined
areas, and an estimated spending capture within
each trade area. Table 31 shows that the ability
for those within a 10 minute walk time to support
additional retail establishments as it stands
currently is extremely limited. Within the primary
trade area, the potential exists to add about 6 new
retail establishments in the South Salem area with
the best opportunities being home furnishings,
clothing stores, shoe stores, and sporting goods
stores.
Residential spending within the secondary trade
area can support additional stores. However, this
trade area represents a larger distance and people
have access to a greater number of competing
retail centers. Restaurants or destination retail
are the most likely types of retail to draw from the
secondary trade area. They often draw a more
regional customer base and tend to do better when
located near one another. Restaurants in particular
can be marketed collectively as a dining destination
and patrons traveling to the area know that they will
have several dining options. Multiple restaurants
also increase the visibility and convenience of a
location.
It is important to note that there are many factors
that influence whether or not a retail store or
restaurants may want to locate in a particular
area. Some of the additional factors that impact
the decision to locate a new retail establishment
include:
»Availability and quality of the retail space
»Size of the spaces available
»Location of the space, i.e., whether it is a
place where many people tend to pass by
»Foot traffic
»Rents and terms
»Parking availability and location
»Product or service price points
»Marketing
»Business plans and acumen
»Zoning and other regulations
»Permitting and inspection processes
The amount of retail captured in this area may
be more or less than projected, dependent on
the above factors. It should also be noted that
implementing the TrOD scenario will increase
the local resident population, providing greater
opportunity for more retail options, especially
eating establishments and places that serve
residents.
56
Consumer Preferences
Based on ESRI business analyst tapestry
segmentation analysis, the top three tapestry
segments within a half mile radius of the proposed
station are “Trendsetters”, “Set to Impress”
and “Emerald City” Below are some highlights
of consumer preferences amongst these three
consumer groups. Table 32 provides more insight
into the types of retail and retail products that may
be successful here, particularly if new residential is
introduced to increase the overall market for retail
in South Salem.
Worker Retail Potential
In addition to residents, workers in or near
the downtown can also support additional
establishments with their spending power. Within
the local trade area (10 minute walk time), there
are approximately 1,365 employees and within the
primary trade area (5 minute drive time) there are
approximately 12,584 employees. If South Salem
could capture the spending power of some of these
workers, local businesses may be able to support
additional establishments as seen Table 33.
Student Retail Potential
With the proximity of Salem State University to
the Study Area, retail establishments will also be
supported by students that live in the area or pass
through the area regularly to attend classes. Table
34 is based on numbers provided by re:fuel agency
and summarizes discretionary student spending at
the national level by category.10
Table 31. Study Area Supportable Businesses, based on Trade Area
MARKET ANALYSIS
10 Re:fuel Agency College Explorer Report, 2014
57
Table 32. Tapestry Segmentation, Retail Preferences (Source: ESRI Business Analyst)
Table 33. Study Area Worker Retail Potential
Table 34. Study Area Student Retail Potential (Source: re: fuel agency, College Explorer 2014)
Assumptions: 50
work weeks per year,
$20/week spending
per Local Trade Area
employee, $10/week
spending per Primary
Trade Area employee
58
Retail Potential with Commuter Rail
Station
The introduction of the commuter rail has the
potential to also catalyze retail development and
increase the market for retail in this area because
of associated investment and new housing that a
new station may spur. In order to determine the
additional potential for retail, MAPC staff made
a conservative estimate about future residential
spending power in the area based on an estimate
of 900-1,100 future units and the current median
disposable income per household within a half
mile radius of the proposed station ($38,219).
Assuming a 15% capture rate, the development
enabled by the South Salem station could help to
support an additional 22,000 to 26,000 square
feet of retail or 11-13 stores.
OFFICE MARKET ANALYSIS
In order to determine the potential office demand
in the South Salem station area, MAPC looked city-
wide to analyze existing inventory, economic trends
in Salem, and regional trends in the office market.
Existing Office Space
In close proximity to the South Salem Study Area,
there is already significant vacant space available
for companies looking to locate their office.
Shetland Park, consisting of four buildings, is a
1.5 million square foot facility on the harbor and
convenient to many of the amenities (including
restaurants and retail) in downtown Salem. As of
February 2017, they had about 220,000 square
feet of vacant space. Average rental rates differ for
Table 35. South Salem Retail Demand (with Station)
Table 36. Commercial Development Pipeline (Source: City of Salem)
MARKET ANALYSIS
59
each use within the facility and are listed below.
»Office: $16.00 - $20.00/sf
»First Floor Warehouse/Industrial: $6.00
-$10.00
»Lower Level Storage: $5.50/sf
»R&D /Industrial Flex: $12.00 - $16.00
Commercial Development Pipeline
and Recently Permitted Commercial
Space
MAPC staff also examined the recent commercial
development pipeline in Salem to see what
other space might be built in the near future.
Table 36 provides commercial permitting data
from the City of Salem covering projects that
have been permitted since 2010. Most of the
recent commercial development has been hotel
development/expansion in addition to retail. There
has not been a major new office development in the
past five years.
Jobs
Salem had a total of 19,628 jobs in 2015 with
10,161 of those being in office inclined sectors.
(See Table 37.) Salem has experienced a 6%
growth in jobs overall within the City from 2005-
2015. This is slightly lower than the percentage
growth of all jobs in Essex County (9%) and the
State (8%) over the same time period. In terms
of office-inclined industries, the City of Salem
has experienced 13% growth since 2005 while
Essex County has experienced 20% growth and
the state overall is at 18% growth. The industry
that has seen the highest percent growth since
2005 is Educational Services at 34% or 739 jobs
were added over this ten year time period. This
compares with 16% in Essex County and 15% in
the state. In FY14, Salem State employed 2,251
people, a significant portion of the educational
services industry in Salem.
Although healthcare represents the largest
portion of workers within an office inclined sector
in Salem, the industry has grown fairly modestly
(17%) over the past ten years when compared
with Essex County (44%) and the state (35%). In
2015, there were 5,379 employees in the Health
Care and Social Assistance industry in Salem.
NSMC employs about 5,000 people (3,500 FTE)
throughout their campuses and makes up a large
share of the Health Care and Social Assistance
industry. NSMC is in the process of constructing a
facility and unlikely to expand again soon, although,
in our discussions, there was the mention of the
potential future need for an outpatient facility.
Wages
When looking at job growth, it’s also important
to see how wages within particular industries are
changing to ensure that residents and workers
in Salem have access to good jobs with wage
growth potential. (See Table 38.) Health Care
& Social Assistance, Educational Services, and
Administrative and Waste Services (the three office
industries that have grown over the last ten years)
have all experienced a decrease in the average
weekly wage over the last ten years. Notably
these sectors have seen positive wage growth over
the same time period in both Essex County and
Massachusetts. The office-inclined industries that
have experienced the highest percentage growth
in their average weekly wage are Real Estate
and Rental and Leasing, followed by Finance and
Insurance and Professional & Technical Services.
As illustrated in Table 37, however, these are not
industries that have added significant amounts of
jobs in the past ten years.
60
MARKET ANALYSIS
Table 37. Comparative Employment Analysis (Source: MA Department of Labor and Workforce Development)
61
Table 38. Wage Comparison (Source: MA Department of Labor and Workforce Development)
62
Largest Employers
MAPC staff also analyzed data on the largest
employers to determine which industries are the
most represented among this group. Table 39
shows the seven employees in Salem that employ
more than 250 people. As you can see, both
North Shore Medical and Salem State University
are at the top of the list. There are a few other
health care employers on this list along with Essex
County Jail, Market Basket, and the Peabody Essex
Museum. These are generally not traditional office
inclined industries.
Employment Projections
Analyzing job projections at the workforce
development level demonstrates which industries
are projected to grow in and around Salem and
where there may be the greatest potential for
Salem to grow its office market.
The Massachusetts Department of Labor and
Workforce Development projects job growth
between 2014 and 2024 for the North Shore
Workforce Development Area (+9.3% or 7,359 jobs
for traditional office oriented industries). Table
40 provides projected job growth within the North
Shore Workforce Development Area in sectors
that are most likely to locate in traditional office
buildings. It is important to note that a number of
municipalities will be competing for these jobs.11
Healthcare and social assistance along with
Professional, scientific, and technical services are
projected to grow the most through 2024 and may
represent opportunities for the City of Salem.
Table 39. Largest Employers, Salem (Source: MA Department of Labor and Workforce Development)
Table 40. Projected Job Growth by Industry, Boston North Shore (Source: MA Department of Labor and Workforce Development)
MARKET ANALYSIS
11 The North Shore WDA includes the following communities: Beverly, Danvers, Essex, Gloucester, Hamilton, Ipswich, Lynn,
Lynnfield, Manchester-by-the-Sea, Marblehead, Middleton, Nahant, Peabody, Rockport, Salem, Saugus, Swampscott, Topsfield,
Wenham
63
Office Market Conditions
MAPC staff also looked broadly at the regional
office market on the north shore to identify the
role of Salem within the larger market. Salem
is part of the Boston-North market as defined by
Jones Lang Lasalle.12 For the sake of comparison,
characteristics of the Boston North submarket are
shown alongside the 128/Mass Pike market and
the overall suburban office market in Table 41.
The table shows that the average asking rent in
the Boston North submarket is still lower than in
128/Mass Pike or the overall suburban market.
However, the vacancy is lower and the year over
year decrease in vacancy is more significant in
Boston North than it is in 128/Mass Pike or in the
overall suburban market.
The Boston North market is performing very well
and 2016 was a strong year for communities in
this market.13 The new headquarters for Partners
Healthcare in Somerville and the new home for
the Federal Bureau of Investigation in Chelsea
contributed to 1.5 million square feet of positive
absorption in the North submarket. Vacancy
in the submarket is the lowest that it has been
since 2001 and the average asking rent is at a
cyclical high of $24.62. Wakefield and Woburn in
particular have experienced significant rent growth.
Over the past decade supply has expanded by 20%
in the North submarket and now contains over 12
million square feet of space. There has also been
significant construction activity with two built-
to-suits completed in 2016 and two speculative
development slated for 2017, including one in
Beverly.
Currently Available & Recently
Leased Office Properties
Although the Boston North submarket is doing well,
it is also important to look specifically at Salem
to see how trends within the City compare with
larger office trends in the submarket and other
communities within the submarket. In general,
the average office rents in Salem are lower than
the average for the Boston North submarket of
$24.62. Table 42 includes a sample office listings
from Loopnet in March of 2017. Within this sample,
the average rent across the Class A space listings
in Salem below is $19; the average rent for Class
B space is $16; and the average rent for Class C
space is $15. An example of vacant office space in
the South Salem Study Area is 10 Jefferson Avenue,
which is listed below and currently renting for $12/
sf.
In addition to lower rents, Salem also has ample
available office space Shetland Park with around
220,000 square feet of available space (going for
$16-$20). This is prime waterfront space close to
the downtown that many potential office tenants
would likely find appealing. In general there has
not been any significant office development within
the City in recent years, particularly in comparison
with other communities within the Boston North
submarket. Competitors such as the Cummings
Center in nearby Beverly are likely to attract office
demand in the region as well. 12 The North submarket includes the communities of Arlington,
Beverly, Chelsea, Danvers, Everett, Lynn, Lynnfield, Malden,
Marblehead, Medford, Melrose, Nahant, North Reading,
Peabody, Reading, Revere, Salem, Saugus, Somerville,
Stoneham, Swampscott, Wakefield, Wilmington, Winchester,
and Woburn
13 JLL, Boston North, Q4 2016
64
South Salem Office Development
Potential
South Salem is unlikely to be a major attractor for
new office space at this point. The limited amount
of office space currently on the market or slated to
come onto the market in Salem suggests that if the
City is interested in increasing office space, build to
suit options may hold the greatest potential. Build
to suit is a way of leasing commercial property
where a developer builds to the specifications
of a tenant and may be a good way to bring a
larger office tenant to this area if desired. The
introduction of a South Salem station could help
to spur office development in the longer term if the
area transforms first through residential and retail
development. If South Salem becomes a dynamic,
transit-oriented area that is well connected to
existing amenities, it will certainly be attractive to
offices that are looking for that kind of environment
for their employees. It will likely be particularly
attractive for young knowledge based workers
that are looking for a dynamic work environment.
However, the station is unlikely to immediately
affect the market potential for additional office
space in this area.
Table 41. Office Market Comparison (Source: Jones Lang Lasalle, Q4 2016 Statistics)
Table 42. Sample Office Listings, Salem (Loopnet.com, March 2017)
MARKET ANALYSIS
65
Lynn Gear Works
Further south from Salem along the Newburyport/
Rockport line is a large proposal that could
provide a useful comparison to a new station in
South Salem. The Project is located at the former
General Electric Gear Works site in Lynn, MA, on
an approximately 65.5-acre site. The proposed
project includes approximately 1.5 million square-
foot transit-oriented development at the River
Works MBTA commuter rail station, comprised
of approximately 1,260 residential units, 2,080
parking spaces, a sports club, retail space, a
leasing/management office, a clubhouse, a pool
house, and a community waterfront building/
pavilion. Currently, the station is only available to
GE employees and under current plans the future
development will not provide public access. The
Final Environmental Impact Form states that the
stop will only be available to the residents, although
that could change in the future.
The development proposal on a currently industrial
site indicates the bullish sentiment for mixed use
development at a commuter rail station north
of Boston. Although the site is not a perfect
comparison – it’s closer to Boston (two stops from
North Station) developed by a single owner – it
provides a guidepost to the development potential
in the area. The developable area is relatively
similar to the Study Area and would be providing
a large amount of development in a currently
underutilized area, catalyzed by a commuter rail
station. The Study Area also has the advantage of
being far better connected the existing downtown
than the Lynn Gear Works proposal is to Lynn’s
downtown. Furthermore, the South Salem stop
would be available to the public, not only the
residents of a high-end development.
Source: Lynnway Associates, LLC
Source: Lynnway Associates, LLC
66
67
This chapter of the report will consider the area’s potential without and with
a commuter rail station. These scenarios build off the market analysis
and provide a potential development scenario over a longer term if various
improvements (described in further detail in the Recommendations chapter) are
made to help the area achieve its potential. Because the rail trail is a critical
factor in the success of this development scenario without a station, it is being
termed the “Trail-Oriented Development Scenario (TrOD).”
The following section will use a similar framework to analyze the area’s potential
with a station, i.e., the Transit-Oriented Development Scenario (TOD).
Following these analyses is a chapter on Managing Neighborhood Change.
The Study Area has great potential for growth over the medium term; however,
this growth may have negative impacts on some segments of the population
and strategies should be implemented to minimize these negative impacts.
This brief chapter is followed by Recommendations. It is important to note
that implementing the two sets of recommendations (i.e., TrOD or TOD) are
not mutually exclusive. Instead, all recommendations in the TrOD Scenario
are applicable if a station is constructed. MAPC recommends the City begin
implementation of the recommendations in the TrOD scenario concurrently as it
continues to plan and advocate for a future station in South Salem. DEVELOPMENT SCENARIOS
68
TRAIL-ORIENTED DEVELOPMENT
OVERVIEW
People value trails and other open spaces
because they provide opportunities for
recreation, exercise that produces health benefits,
multimodal transportation routes, conservation of
habitats and biodiversity, and aesthetic / visual /
psychological benefits.
Recently, community leaders and planners, buoyed
by sophisticated new economic studies, have
begun to use trails, greenways, and urban parks as
economic engines for community revitalization.14
Mounting new evidence shows an almost universal
positive connection between well-designed
trails and open spaces and important economic
development indicators.
Trails are increasingly being used to help more
urban communities revitalize long-underutilized
corridors, such as the South Salem Study Area.
Trails can contribute to creating strong, vital
communities with increased property values
for area residents and improved economic
opportunities for local businesses. Utilizing trails
to spur revitalization is part of a concept known as
Trail-Oriented Development (TrOD). TrOD seeks to
combine the active transportation benefits of a trail
with the revitalization potential associated with well-
designed and well-managed urban parks to help
create more livable communities.
Numerous studies suggest that a shared use
path provides an attraction for home buyers and
a new market for local businesses. The potential
synergy associated with well-designed trail corridors
and revitalization planning has attracted several
communities around North America to experiment
with TrOD-type redevelopment projects. For
example, Minneapolis’ Midtown Greenway project
is a paradigmatic example of this movement.
(Montreal’s Lachine Canal redevelopment is
another strong example.) It has experienced
success in encouraging redevelopment through
the mix of new public space amenities and zoning
changes designed to facilitate new mixed-use
development on underutilized corridors.
The first phase of the Midtown Greenway was
opened in 2000, converting a rail line trench into
a new neighborhood amenity. The depressed
former rail line, however, was not well-connected
to communities around the trail. During the next
several years, members of the Midtown Greenway
Coalition worked to create zoning and land use
plans designed to provide enhanced access to
the trail. Similarly, Salem rail trail, combined
with appropriate zoning changes and creating a
connected network throughout the downtown, could
similarly spur revitalization along parts of the Study
Area.
14 Numerous studies have examined the economic benefits of trails. E.g., Lindsey et al (2003) found that proximity to a greenway
generally has a statistically significant, positive effect on property values. In Austin, Texas, increased property values associated
with a single greenway were estimated to result in $13.64 million of new property tax revenue (Nicholls and Crompton, 2005).
In Dallas, developers report that there is a 25 percent premium for properties adjacent to the Katy Trail (Dallas Morning News,
2006).
Sources: From Trail Towns to TrOD: Trails and Economic Development. 2007. www.railstotrails.org; Property Values, Recreation
Values, and Urban Greenways. 2004. Greg Lindsey et al. Journal of Park and Recreation Administration. Volume 22, No. 3 pp
69-90.
Figure 33. Pictures of Minneapolis’ Midtown Greenway under
current conditions. (Sources: Railstotrails.org (top); Star Tribune
(bottom))
DEVELOPMENT SCENARIOS
69
Figure 34. The images below depict a section of the trail showing development prior to the Midtown Greenway’s opening in 2000 (top) and existing conditions
(bottom). Numerous under-utilized sites have been redeveloped in the past 15 years. (Source: Google Earth Imagery)
Rail trail corridor
2000
2017
70
DEVELOPMENT SCENARIO: TrOD
As noted previously, this section provides a
development scenario over the medium term
(approximately 10 years). This is not intended
to suggest what necessarily will happen in the
future; rather, it provides a realistic scenario for
future development if various recommendations
(described in the following chapter) are met. The
actual land use mix and development intensity
could vary from this scenario. Furthermore, this
scenario does not provide a vision for what the
community should do; instead, it illustrates the
development potential for the area. Other planning
initiatives, such as the City’s master planning
process, will help the City develop the area’s vision.
The division of the Study Area into subareas is
shown in Figure 35. Each subarea has its own
unique characteristics, which help inform the
development scenario. A brief description of each
of the subareas is below.
Subarea 1
At 7 acres, this is the smallest of the subareas. It
is located at the northern end of the site, adjacent
to the traditional downtown, and runs along Canal
Street to St. Paul Street. The subarea contains
29 parcels with 163,000 square feet of building
area. The uses and building styles vary greatly,
from 6 story multifamily buildings to auto-oriented
services, and the size of parcels are relatively
small.
Subarea 2
This subarea runs between Canal Street and the
rail line south of Subarea 1 to Jefferson Avenue.
This is the largest subarea, comprised of 37 parcels
over its 28.9 acres, with a total of 348,000 square
feet of building area. The parcels in this subarea
are generally larger than those of Subarea 1. Much
of the site is devoted to auto-centric retail activities
in single story buildings. The subarea is adjacent to
Salem State University.
Subarea 3
The 16.7 acre MBTA-owned parcel is by far the
largest single parcel in the Study Area. (The second
largest parcel in the Study Area, housing the
industrial company, Univar, is less than half that
size.) MAPC engaged in several conversations with
Greystone Solutions, which has a joint contract with
Jones Lang LaSalle to provide real estate services
to the MBTA, including asset management, property
disposition, and consulting services. Greystone
staff informed MAPC that the site currently contains
several revenue-producing tenants (adjacent
property owners are leasing space), and they are
actively formalizing and clarifying the boundaries of
each at this time.
Over the longer term, commuter rail operations
staff have indicated that they believe the site
could continue to be used for its operations, as it
is the only remaining large parcel of MBTA-owned
land on the north shore. Further complicating
future potential development on the site, Pan
Am has certain freight rights along the inactive
rails that would need to be released to the extent
a permanent change to the property occurred.
Finally, there are numerous power lines running
through the site.
Subarea 4
This subarea runs along Jefferson Avenue from the
Police Station to the access point for the MBTA’s
property (to the south of Jackson Street). It is 18.3
acres with 173,000 square feet of building area
among its 14 parcels. The subarea contains a
hodgepodge of uses, including the Police Station,
the Department of Public Works, industrial spaces,
and a variety of retail services.
Subarea 5
This subarea contains 7 parcels over 20.5 acres.
The 148,000 square foot Univar building is the
largest single building in the Study Area, despite
being only 1 to 2 stories. Univar is a multinational
distributor of chemistry and related products. In
addition to Univar, the subarea contains wetlands,
offices, industrial uses, and serviced-oriented retail
spaces. Total building area is 223,000 square
feet. Subarea 5 is adjacent to North Shore Medical
Center.
DEVELOPMENT SCENARIOS
71
Figure 35. Study Area Subareas
Subarea 2Subarea 3Subarea 4Subarea 5 Subarea 1
72
Assumptions
As noted above, these scenarios are intended
to provide a realistic assessment of the
redevelopment potential. Accordingly, several
assumptions were made. Because the scenario
considers development potential, it did not consider
existing zoning as a limiting factor. Instead, parking
area was considered the primary driver of buildable
space; i.e., ensuring a realistic balance between
needed parking and building area. MAPC assumed
1.5 spaces per residential unit and 4 spaces per
1,000 gross square feet of commercial space.
These ratios are often considered best practices in
neighborhoods lacking strong transit access. Gross
parking space area was assumed to be 350 square
feet. Units in multifamily homes were assumed
to average 1,100 square feet. Townhomes were
assumed to be 2,400 square feet (60x20 sq’
footprint), including direct access parking.
Examples of building styles that may be appropriate for Study Area
Janus Highlands
Chelsea,MA
14.6 units per acre
Janus Highlands
Chelsea,MA
14.6 units per acre
50 Waltham St.
Lexington, MA
50 units per acre
DEVELOPMENT SCENARIOS
73
Subarea 1
Subarea 1 is proximate to downtown, making it
a prime location within the Study Area. Even the
furthest parcels within the subarea are within a
one mile walkshed of the existing station. Several
parcels are part of the Central Development district,
allowing dense, mixed-use development, including
residential. The small parcels, however, generally
limit major redevelopment opportunities. The
scenario focused, therefore, on the larger parcels.
This includes:
»The site of the Phoenix School on Jefferson
Avenue, where the property owner has
suggested he may redevelop in the future
into multifamily residential units;
»The parcel immediately to the north, which
contains a one story commercial space; and,
»Two of the larger parcels along Canal Street,
which contain retail and industrial space.
The future scenario for Subarea 1 with no
station has several 2-4 story buildings, primarily
residential, adding 33,850 square feet to the
existing buildings. This results in 58 additional
dwelling units.
Figure 36. Subarea 1 TrOD Development Scenario
= potential new building
74
Subarea 2
The proximity to Salem State University and
its larger parcels are key strengths of Subarea
2. Its primary challenge is it is farther from
downtown Salem, thus making it less attractive
for development. It is also currently zoned
for industrial and highway business uses,
implying zoning would need to be changed to
fully take advantage of its potential. Despite
these challenges, Subarea 2 has a high level
of redevelopment potential. The first phase of
a shared use path along the rail right of way,
connecting the existing Marblehead Shared Use
Path to the downtown, is under construction. The
second phase is programmed in the Transportation
Improvement Program (TIP) for 2018 construction.
The combination of developing an industrial space
with a shared use path has the potential to spur
revitalization in the area under the guise of trail-
oriented development.
The scenario focused on redevelopment
opportunities south of Ocean Avenue. To the north
is Crosby Marketplace and associated stores.
There is a potential opportunity on this property
to create additional retail space along the street
frontage, thus creating a more walkable feel and
taking advantage of the relatively strong retail
market in this location. Across Canal Street there
are a number of single story commercial buildings,
built relatively recently.
At the far south end of the subarea, the retail
spaces were assumed to be retained, given the
location at the crossroads of several arterials and
relatively new construction.
These small commercial clusters bookend an
opportunity for redevelopment. Along Broadway are
numerous industrial and commercial businesses,
directly abutting wetlands to the west and single
and two family homes on the east. As noted
above, a shared use path will provide access to
the downtown and, by extension, the commuter
rail station, by a short bicycle ride. A combination
of multifamily buildings and townhomes could
accommodate approximately 350 residential units,
as well as the potential for ground floor retail along
parts of Canal Street. Total additional development
in Subarea 2 was 281,000 square feet, excluding
space assumed to be built by SSU.
DEVELOPMENT SCENARIOS
75
= potential new building
Figure 37. Subarea 2 TrOD Development Scenario with adjacent Salem State University Campus
Future rail trail
76
Subareas 3-5
Under a scenario with no commuter rail station
in South Salem, redevelopment potential in
Subareas 3-5 (i.e., along Jefferson Avenue) is
limited. Although the area is proximate to North
Shore Medical Center and contains wetlands that
could be viewed as a public amenity, the subareas’
challenges overshadow these strengths. The
MBTA-owned parcel is a large and potentially
catalytic site, but given the MBTA’s operational
needs and other complicating factors, it is unlikely
to be redeveloped. Subarea 4 is outside the one-
mile walkshed from the existing station, limiting
potential for walkable, mixed-use development.
Finally, the area is predominately industrial and
lacks the development pressure that a commuter
rail station may provide to significantly redevelop.
If the City relocates its DPW and finds alternative
spaces for other industrial properties in the area,
this could help kick-start development in this
subarea.
Figure 38. Subareas 3-5 TrOD Development Scenario
= potential new building
DEVELOPMENT SCENARIOS
77
Table 43. TrOD Development Scenario Summary
Figure 39. TrOD Development Diagram
TrOD Development Scenario
Summary
Table 43 summarizes the existing conditions and
TrOD development scenario. By implementing
various recommendations the Study Area could
potentially increase the amount of housing
units from 57 today to between 350-400 units
(approximately 600,000 square feet). Total
commercial space fell as space along Canal Street
and Broadway gave way to residential and mixed
use development.
= potential new building
78
DEVELOPMENT SCENARIO: TOD
A new commuter rail station in South Salem would
provide numerous benefits for both the City and
region. While the future development could have a
strong fiscal impact for the City, it would also help
the region tackle its lack of housing inventory in
general and lack of affordable housing in particular.
By unlocking the potential for more development,
especially around transit, the region could grow in
a sustainable manner that minimizes the need for
single occupancy vehicle trips, especially for those
commuting to Boston. Given its location adjacent
to SSU and, to a lesser degree, NSMC, a South
Salem Station could further reduce vehicle miles
traveled (VMT) by increasing the number of reverse
commuters. Although some students do utilize the
existing station and SSU shuttle, a station close to
the university could make the commuter rail a more
feasible option.
As the market analysis explains in detail, a
commuter rail station will greatly increase the
market potential for the Study Area, especially
for new housing. The new station could unlock
development potential in the following ways:
1. Walkshed. As Figure 40 illustrates, the
majority of the Study Area is within a half mile
walk (approximately ten minutes for the average
person) of the proposed station location. The
entire site and beyond is within one mile of the
station, thus making it an option for residents
beyond the Study Area.
2. Reduced parking requirements. The presence
of a commuter rail station would allow for a
reduction in the parking requirements for the
Study Area. This reduction allows for more
building area on the same sized parcel. For the
TOD scenario, MAPC has assumed one parking
space per dwelling unit. MAPC research has
found that parking utilization for multifamily
residential properties within a mile of a transit
station to be less than one. In some cases,
parking requirements for commercial property
have also been reduced from 4 spaces per
1,000 square feet of building area to 2
spaces per 1,000 square feet. (For additional
information regarding parking, please see Bass
River District Rezoning sidebox.) The basis for
this assumption was developers could request
relief from the 4 spaces per 1,000 square feet
requirement if they could show parking demand
would be met or accommodated from other
means. For the purpose of the model, it was
assumed that the presence of on-street parking
would provide that demand.
3. Connection to Jefferson Avenue. The
conceptual plans for a new station create an
east-west connection to Jefferson Avenue. This
connection could help stimulate demand for
additional development in this area.
4. Potentially incentivize development of
MBTA parcel. Given the recent discussions
with Greystone, the Development Scenario
did not utilize the MBTA’s parcel for future
growth. There is the potential, however, that
the presence of a commuter rail station could
provide an incentive for the MBTA to use all or
even part of the site for private development, as
it would be an attractive location, especially for
residential uses.
Figure 40. Concepts affecting the TOD development scenario potential.
DEVELOPMENT SCENARIOS
79
Beverly Bass River District Rezoning
As noted previously, the main change in assumptions
from the TrOD Scenario is the reduction in parking
requirements. Several years ago the City of Beverly
worked with MAPC on a TOD study for the area
around its Beverly Depot station. The City is currently
in the process of implementing a rezoning of this
district. The following are draft parking requirements.
Given its location just to the north of Salem, the City
may want to use these regulations as a starting point
for its own rezoning efforts:
Parking Requirements
1. Off-Street parking shall be provided in accordance
with the requirements set forth in Section 38-25,
except standards provided within this section shall
take precedence where there is a conflict. The
following on-site parking requirements apply for the
BR District:
a. Residential:
»1 bedroom or less – .75 spaces per dwelling
unit
»2 or more bedrooms – 1 space per dwelling
unit
b. Retail trade: 1 space per 500 square feet of
floor area
c. Personal services: 1 space per 500 square feet
of floor area
d. Professional office: 1 space per 500 square
feet of floor area
2. Off-street parking may be provided under or on
the first floor of commercial, residential, or mixed-use
buildings provided the primary use screens parking
facilities from the public way, internal circulation
pathways, and waterfront walkways.
3. Bicycle Parking Facilities: Bicycle parking
shall be provided for all new development to the
following standards:
a. Bicycle parking facilities shall be at least
fifty (50) percent sheltered from the elements,
and shall be located as close as possible to the
building entrance(s).
b. One (1) bicycle parking space shall be
provided for each twenty (20) off-street parking
spaces required.
c. Each will be a minimum of two (2) feet wide
by six (6) feet long.
d. Rack(s) will be provided that allow for the
bicycle frame and one wheel to be locked to the
rack and that support the bicycle in a stable
position without damage to wheels, frame or
components. All bicycle racks and lockers shall
be securely anchored to the ground or building
structure.
e. Any property required to have bicycle
parking may establish a shared bicycle parking
facility with any other property owner within the
same block.
4. Transportation Demand Management: For new
development projects or substantial alterations
or improvements to buildings over 10,000 square
feet shall develop and implement a Transportation
Demand Management (TDM) plan to be approved
by the permit granting authority.
Subarea 1
The amount of development increased slightly in
Subarea 1 from the TrOD, from 196,000 square
feet and 115 residential units to 250,000 square
feet and 150 residential units. The reduced
parking requirements allowed for slightly denser
buildings on the parcels noted in the TrOD scenario
for having the greatest potential.
= potential new building
Figure 41. TOD Scenario Subarea 1
80
Subarea 2
This area again had the largest potential for
transformation. In addition to building off its
potential without a station, the area was able
to develop more densely due to the reduction
in parking requirements. (Some buildings were
assumed to be built prior to a station and therefore
utilized the parking assumptions associated with
the TrOD scenario.) In addition, several parcels
further north, which are adjacent to the commuter
rail station, were assumed to be redeveloped under
= potential new building
this scenario. Total development in Subarea 2 was
1,030,000 square feet and 530 residential units,
up from 683,000 square feet and 268 residential
units under the TrOD scenario.
Subarea 3
This development scenario assumes the MBTA-
owned parcel would not be developed, due to the
MBTA’s stated operational needs.
Subarea 4
As with the TrOD scenario, development potential
in this area was considered limited, especially
because other areas closer to the station could
accommodate expected demand. If other
subareas, such as Subarea 5, are not fully
developed and if the existing DPW is relocated,
Subarea 4 could help accommodate the increased
future demand for development.
Figure 42. TOD Scenario Subarea 2
DEVELOPMENT SCENARIOS
81
Subarea 5
This subarea saw the most dramatic change from
the TrOD scenario, which had modeled no new
development. With the creation of an east-west
connection, and the adjacency to a highly sought
after amenity such as a commuter rail station,
there could be far greater financial incentive for
the industrial plant, Univar, to relocate. This large
parcel, next to the commuter rail, would be an
ideal location for multifamily housing; furthermore,
its size suggests that development potential is
great enough to make a structured parking facility
feasible, which would further increase development
potential. The model illustrates an example with
two buildings, oriented towards the wetlands with
parking situated to provide a buffer to the existing
single family residential area immediately to the
south. The structured parking allows for 2 buildings
of 3 and 5 stories, providing approximately 400
residential units.
In addition, the station could allow for a slight
increase in the number of commercial office and
retail spaces, including a redeveloped building at
10 Colonial Drive (providing an additional floor of
leasable space) and two modest buildings at 65
Jefferson Avenue. Given the proximity to NSMC,
this location could provide medical office or other
space complementary to the hospital.
Figure 43. TOD Scenario Subarea 5. The Green line indicates one of the potential access points (developed under the AECOM feasibility study), providing a direct connection to Jefferson Avenue
and North Shore Medical Center.
82
DEVELOPMENT SCENARIOS
Development Scenario: Summary
As Table 44 summarizes, the change in
assumptions and development opportunities a new
station would provide, the amount of development
increases significantly by the presence of a
commuter rail station in South Salem.
Table 44. Development Scenario Summary
83
Figure 44. TOD Development Scenario Land Use Diagram
84
85
INTRODUCTION TO NEIGHBORHOOD CHANGE
New investment in a community typically brings change beyond the investment
itself, whether it’s significant new development, redevelopment, new
transit, or new bike/ped infrastructure. The larger the investment, the greater
the opportunity for change. Some of these changes are positive, ranging from
improved connectivity to environmental and public health to meeting market
demand to beautification, depending on the investment. But they can also bring
potential risks. NEIGHBORHOOD CHANGE
86
Because Salem is home to significant lower-
income and minority populations, it is likely that
new investment on a large enough scale will
lead to gentrification in South Salem and even
accelerate this phenomenon elsewhere in the
City.15 Gentrification usually coincides with one of
two changes in housing occupancy:
• Replacement: Replacement occurs when the
number and composition of out-migrants does
not change, but the people who move in have
different demographics from those who move
out. With this pattern, current residents do not
face pressure to leave, but those who choose
to are replaced by residents with a different
demographic profile.
• Displacement: Displacement occurs when the
rate of outmigration is higher than it otherwise
would be because lower-income residents move
due to increases in housing costs and a lack
of affordable options. In-migrants can afford a
higher cost of living and tend to have a different
demographic profile from those who move out.16
The differences between these kinds of housing
occupancy changes can be subtle, but meaningful.
Importantly, either of them—not just displacement—
result in profound changes in the demographic
composition and social cohesion of a community.
It is likely that one or both of these changes in
housing occupancy and the associated changes
in demographic composition will happen in Salem
as an indirect result of new development trends
already underway and those that emerge in
response to new investment in South Salem.
It is vital, then, that the City and community leaders
take action to manage the market inflation that
results from reinvestment and can prompt the
relocation of low- and moderate-income residents,
either by choice or displacement, to less accessible
areas where housing is more affordable. History
shows us that cities in the Greater Boston region
and across the country do not always rise to this
challenge. But Salem can plan ahead to leverage
investment and mitigate the risks associated
with it. Ideally, this results in a more equitable
distribution of the benefits of new investment
among current residents and new ones. In Salem,
this would mean the city maintains its diversity and
vibrancy, while offering new opportunities to both
those who currently live there and those who are
seeking to call it home.
Towards that end, this section explores the key
neighborhood changes that are most likely to occur
in Salem and why. Ultimately, it recommends
strategies to manage change in Salem, including
leveraging opportunities and mitigating risks.
NEIGHBORHOOD CHANGE
Figure 45. Pathways of neighborhood change
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THREE SCENARIOS FOR CHANGE
Salem faces three different residential market
change scenarios, each with similar associated
risks but varying in degree.
1. Naturally-Occuring Change
Salem is already changing as a result of market
forces. Increased demand for housing has
increased land acquisition and construction costs,
which is then passed on to buyers and renters. Of
course, some areas of the city are seeing more
new development and increased housing costs
than others. The downtown has changed more
dramatically than other parts of Salem, with several
new high-rises home to luxury apartments and
condos.
Unless housing demand dwindles or is completely
absorbed elsewhere, it’s only a matter of time
before top-tier development opportunities dwindle
in the city center and developers look elsewhere
in Salem. As that happens, new development will
likely head south to the Study Area. Though the
Study Area itself is largely industrial, it’s surrounded
by residential land uses. New residential
development will likely have an inflationary effect
on surrounding housing costs, incentivizing
homeowners to sell and posing the risk of
displacement to renters whose landlords are eager
to raise rents in response to demand from a higher-
earning demographic drawn to the area by the new
development.
2. TrOD-Associated Change
Even without a major catalyst, Salem is undergoing
change. But South Salem, a largely industrial area,
has generally stayed the same in recent years.
Public investment in the form of the new rail trail
along Canal Street, however, will likely attract new
developer interest, as such interventions have been
shown to do elsewhere. There are several studies
connecting trails with increased property values,
and examples connecting new trails with rezoning
and new development.
For example, the Minneapolis Midtown Greenway,
which opened in 2000, coincided with $200
million in residential development and more than
1,200 new units. Together, these changes quickly
transformed a former industrial area into one of
Minneapolis’ trendiest, not to mention expensive,
residential neighborhoods.17 (See page 66 for
additional information.)
An increase in land and property values along the
South Salem rail trail and new development that
attract a different demographic to the area will
impact the existing lower-income residential base in
much the same way as described above, but likely
more dramatically in terms of the speed and rate of
market inflation.
3. TOD-Associated Change
As with the new rail trail, a new commuter
rail station in South Salem is likely to have an
inflationary effect on surrounding land, influencing
development trends and, as an extension,
population composition.
History shows that development often follows
transit. U.S. examples include Fulton Market in
Chicago, downtown Kansas City, Austin, and the
RiNo neighborhood in Denver. Development ranges
from residential to mixed-use to commercial,
and depends on a variety of factors, especially
land availability and rezoning. Numerous studies
support this observation, showing that proximity to
rapid rail transit increases property values, whether
commercial or residential, including in Washington,
D.C., the San Francisco Bay area, New York, Boston,
Los Angeles, Philadelphia, Portland, and San Diego
(though some studies in other cities have shown
mixed results).19
Increases in property values in areas with proximity
to transit are tied to both the transit itself and new
TOD. By making neighborhoods more accessible,
transit often attracts new development and with
it, new residents, raising land and property values
and housing costs. Current residents who don’t
own their homes may be replaced by more affluent
households, while low-income households may
be prevented from moving into the neighborhood
by the high housing costs. This pattern is similar
to that anticipated in the development scenarios,
but the impacts of a new station on a lower-to-
moderate-income population like that in South
Salem will like be more dramatic than what is
anticipated in either a TrOD scenario or one of
naturally-occurring change.
15 MAPC thinks of gentrification as a particular type of
neighborhood change defined by an increase in housing costs
and an influx of new, higher-income residents.
16 “The Dimensions of Displacement: Baseline Data for
Managing Neighborhood Change in Somerville’s Green Line
Corridor.” MAPC. February 2014.
17 www.startribune.com/midtown-greenway-spurs-urban-
development-especially-in-uptown/303081591
18 www.nytimes.com/2017/05/23/business/transit-rail-
property-development.html?_r=0
19 www.thoughtco.com/rail-transit-and-property-
values-2798802
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RISKS ASSOCIATED WITH
NEIGHBORHOOD CHANGE
In any context, change brings both benefits and
risks. In South Salem, the benefits of new land
uses and development, a shared use path, and
even a commuter rail station have been described
elsewhere in this report. Here, we’ll consider more
specific risks to the area’s residential landscape
and population composition.
Because the housing stock is generally older, small-
scale multifamily, rental properties, it is vulnerable
to redevelopment or tear down in strengthening
markets. It’s typically replaced with higher-cost
housing, reflecting higher land acquisition costs
and increased demand.
Because current Salem residents tend to be lower
income than the County and State, they will struggle
to afford the new housing that replaces the old or
even the older housing that remains but increases
in cost due to greater demand from a new higher-
income population attracted by new investment.
Vulnerable Housing Stock
Condominium Conversion
Salem’s existing housing stock is relatively old,
with more than half of units (54%) built before
World War II. Only 6%, or 1,080 units, of the City’s
housing has been built since 2000 (ACS 2011-
15). More than a third of Salem’s housing units
(39% or 7,570) are in smaller multifamily buildings
consisting of 2-4 units total. Given that a slight
majority of Salem’s housing (52% or 9,356) is
renter-occupied (ACS 2011-15), we know that many
of the units in these smaller multifamily buildings
are for rent.
Higher-income residents priced out of Inner Core
markets and drawn to Salem by the changes taking
place are more likely to have the resources and
inclination to seek out for-sale rather than rental
housing. If new construction does not provide the
supply demanded by them, then owners of existing
rental units may find it profitable to convert their
properties to a condominium form of ownership
and sell off the units individually rather than renting
them.
Salem’s existing housing stock—composed primarily
of older, smaller multifamily structures comprised
of rental units—are especially vulnerable to
condominium conversions. Developers can often
acquire them at competitive prices, and resell them
for a considerable profit, depleting the city’s rental
housing stock in the process. As options to rent
dwindle, residents require greater means, in the
form of a down payment, to secure housing.
Expiring Subsidized Housing
Based on data from the Commonwealth’s
Subsidized Housing Inventory, the ratio of Salem’s
deed-restricted affordable housing stock to overall
housing stock has remained fairly steady in recent
years. In 2002, subsidized housing represented
12.50% of the total year-round housing. That
rate rose to 14.31% in 2008, before dropping to
12.35% in 2014. By 2016, it was up to 12.98%.
As we approach 2020, when a new and higher
Census estimate for Salem’s overall housing supply
will be issued, it is important that production of
affordable units remains apace or increases so that
opportunities for lower-income households in the
city do not decrease.
With rising rents and sale prices, conversion of
rental units to condominiums, and new units added
at the high end of the market, publicly subsidized
housing increasingly provides the primary means
for low-income households to remain in Salem.
While the city has a significant supply of project-
based deed-restricted affordable housing—2,465
units—a significant portion of this stock is at risk.
Many deed restrictions have a specified term, often
ranging from 30 to 100 years, after which the units
can be rented or sold at market rates. Owners
can choose to renew their affordability contracts
before they expire by refinancing, but there is less
incentive to do so in appreciating housing markets
like Salem. If they do not, lower-income households
with few affordable alternatives can be displaced.
While 969 units (39%) of Salem’s subsidized
housing inventory are affordable in perpetuity,
1,419 units (58%) could expire at some point
down the line. This is a far-off risk for some units,
but others will be vulnerable in the near future.
Between now and the year 2035, 998 units could
be lost, 41% of Salem’s total deed-restricted
affordable housing supply.
Considering that Salem’s inventory of affordable
housing, though large, is insufficient to meet the
needs of existing residents—2,465 units for 9,095
eligible households—it is vital that this stock be
preserved. Towards that end, the City should work
with property owners to extend affordability, and
with developers to ensure new affordable housing
units are produced.
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Vulnerable Populations
Renters & Residents of Color
More than half of Salem residents (52%) rent their
homes, a much higher rate than the state (38%) or
Essex County (37%) (ACS 2011-2015). Renters are
more vulnerable to changes in the housing market
than homeowners. The latter may be incentivized
to sell their units by rising home sale prices or rising
taxes associated with increased property values
and relocate, but renters may be displaced by
property owners who raise rents or convert units to
ownership. City-wide, monthly asking rent in Salem
rose dramatically from $1,481 in 2010 to $1,875 in
2016, a 27% increase, according to Zillow data.
Of Salem’s 9,125 renter households, 4,239 or
46% are cost burdened, meaning they pay 30% or
more of their household income on housing costs
(CHAS 2008-12). The US Department of Housing
and Urban Development (HUD) considers a rate of
cost burden exceeding 30% to pose various issues
for a community, ranging from housing instability
to a lack of discretionary income to support local
business. If Salem rents continue to rise, as is
likely, it will become more and more difficult for
these cost-burdened renter households to afford to
stay in Salem.
While more than half of white residents, who
comprise 75% of Salem, are homeowners (53%),
the vast majority of Latinos (84%), African-
Americans (85%), and Asians (98%) are renters
(ACS 2011-15). The disparity between white and
Latino homeownership rates is 37%, 38% between
white and African American homeownership rates,
and 51% between white and Asian homeownership
Figure 46. Summary of Vulnerable Housing Stock, Salem
Figure 47. Summary of Subsidized Housing Inventory, Salem
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rates. The homeownership gap between white
residents and people of color in Salem—though
similar to that in Essex County and the State (with
the exception of Asians)—is dramatic.20 In general,
white residents of Salem are 20% more likely to
own a home than residents of color. Since people
of color make up a disproportionate share of renter
households in Salem, these communities are at
a greater risk of displacement as a result of rising
housing costs.
As home sale prices increase in the City,
homeownership opportunities decrease. Since
2011, when home prices were at a 10-year low,
median sales price has increased 22% from
$256,577 to $312,500. Though this price remains
lower than many of Salem’s neighbors (except
for Lynn at $288,500), the rate of increase is
noteworthy. As these trends continue with a
strengthening economy, Salem is at risk of losing
racial, ethnic, and economic diversity.
Low-Income Households
Median household income in Salem is significantly
lower than that of the state and Essex County:
$60,690, $68,563, and $69,068, respectively
(ACS 2011-15 Estimates, adjusted to 2015 dollars).
Of Salem’s 18,365 households, half (9,095) qualify
as low income (CHAS 2009-13), meaning the
household has a total income of no more than 80%
of area median income (AMI), which amounts to
$73,050 for a household of four in this area.
Of the low-income households that live in Salem,
more than one-third (33%) are small families and
another third (31%) are non-family households,
such as roommates. Nearly a quarter (22%) of low-
income households are composed of elderly non-
related residents. Only 10% of low-income Salem
households are elderly families and 4% are large
families of 5 or more people.
There are very high rates of cost burden among
low-income Salem households. While 46% of all
households pay 30% or more of their income on
housing, the rate increases to 64% for low-income
households (5,805 households) (ACS 2008-12).
A very high number of low-income households in
Salem rent. Of the 9,356 renter households in the
Figure 48. Low Income Household Summary, Salem
20 The homeownership gap between white residents and African
Americans does not vary greatly from Salem to Essex County to
the State: 38%, 35%, and 39%. Between whites and Latinos,
the gap is smaller in Salem: 38%, 43%, and 46%. Between
whites and Asians, however, the gap is much higher in Salem:
51%, 17%, and 5%.
91
city, more than a third are low income—6,035. Of
those low-income renter households, 4,050 or 69%
are also cost burdened (CHAS, 2008-12).
Young Adults and Seniors
In Salem, incomes vary by age of householder, with
very young and older adults living on much less
than those in between. While approximately one-
third of householders age 25-64 earn $100,000 or
more a year, only 8% of householders under 25 and
12% of those 65 or older have such high incomes.
Approximately one-quarter of both groups on either
end of the age range earn less than $20,000
annually; another 36% of those under 25 earn
between $20,000 and $39,999 and 29% of those
65 and older have incomes within that range
(ACS 2011-15). It’s likely that these younger
householders haven’t maximized their earning
potential yet, but the older householders are likely
on low fixed incomes. Either way, because of their
lower incomes, younger householders and seniors
are most likely to see their housing opportunities
decrease as the market strengthens in Salem and
housing costs increase.
However, because older Salem residents tend to be
homeowners, they have greater housing security
than their younger counterparts. The rental rate
for those age 65-74 is 6% and goes down to 2%
for those age 75-84 and 3% for those 85 and
older. This is compared to 27% for those age 25-
34. Nevertheless, older Salem residents may be
incentivized to sell their homes by the higher prices
their properties suddenly command, and unable to
relocate within their communities unless adequate
alternative housing is available—that is, affordable
units and ones that are appropriate in terms of
size, layout (bedrooms on the main level), and
maintenance needed.
This need is intensified by the fact that the senior
population is increasing. In fact, between 2000
and 2010, Salem’s growing population experienced
the largest increases among those age 50-59
(26%) and 60-74 (19%). Going forward, MAPC
projects those two age groups to grow at even
faster rates, by 52% and 33% between 2010 and
2030, respectively.
MANAGING NEIGHBORHOOD
CHANGE
The City of Salem is already changing in many
ways, including a strengthening housing market
and demand from higher-income residents. There
are many indications this is likely to continue; the
question is to what degree?
In high-demand markets like those in the metro
Boston region, housing costs will rise regardless
of whether new, higher-cost housing goes in. In a
scenario where no new housing is added, intense
market pressures will cause rents to rise and rental
units to convert to condominiums. In a scenario
where new housing is added, however, rents don’t
always stabilize—often they increase, just at a
slower rate than in the first scenario. This is likely
because regional demand in markets like Boston
overwhelms local increases in housing supply. In
such cases, new development in a neighborhood
often coincides with gentrification.21 MAPC
supports new residential development to address
the housing crisis in our region by helping to meet
housing demand, provided it coincides with the
necessary regulatory actions to protect lower- and
moderate-income households. Please refer to the
Recommendations chapter for strategies to better
maintain Salem’s socioeconomic diversity as the
city’s residential market continues to improve with
infrastructural investment, increasing housing
demand, and new development.
21 www.refinblog.com/new-housing-and-displacement-in-the-
bay-area/
92
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The following recommendations can help the Study Area achieve its greatest
potential both with and without (or prior to) a commuter rail station. The
majority of recommendations will positively impact the area regardless of when/
whether a station is constructed; thus, MAPC recommends the City pursue these
recommendations while it concurrently continues to plan for a new station.
Introduction of the commuter rail impacts the recommendations in several ways,
which are noted below.RECOMMENDATIONS
94
RECOMMENDATIONS
LAND USE + ZONING
Zoning is perhaps the strongest tool the City has
to impact the built environment. A combination
of altering dimensional standards and changing
allowed (and prohibited) uses in the Study Area
will allow developers to maximize the opportunities
created by both the rail trail and future commuter
rail station.
Extension of Central Development
Given its proximity to the traditional downtown, the
Central Development District could be extended
down a section of Canal Street. As the downtown
becomes built out adjacent neighborhoods could
see increasing demand for mixed-use development,
including residential. MAPC recommends
considering extension of the Central Development
district to approximately Cypress Street, which
would put the farthest parcels within 1,000 feet of
large municipal parking lot located immediately to
the north of the site.
Rezoning for portion of Subarea 2
Because of the shared use path and its proximity
to SSU, Subarea 2 has a strong potential for
redevelopment. If SSU purchases and redevelops
a property in this area, it will further help catalyze
redevelopment; regardless, appropriate zoning will
be needed for change to occur.
The boundaries for a new zoning district can
start on a focused area and be expanded as
development occurs, if needed. For example, the
area envisioned under the TrOD scenario began
at Ocean Avenue on the north and ran between
Canal Street and the rail line down to Rose Street.
The City should determine whether it prefers
to implement new base zoning or establish an
overlay district. The advantage to the latter is it
avoids conflicts with existing non-conforming uses.
Changing the underlying zoning, however, would
provide a more emphatic statement and potentially
accelerate change. It would also help to avoid
noxious and incompatible uses with new residential
development. Regardless, the new district could be
defined as the “South Salem Trail-Oriented District,”
which could later be amended to the “South Salem
Transit-Oriented District.”
Most critically, the new district should allow
residential uses, which are not allowed under
existing zoning. Multifamily and mixed-use
buildings, especially should be encouraged,
as well as townhouse style buildings. Eating
establishments, especially with outdoor seating,
should also be allowed and encouraged.
Dimensional standards for this District could be
based off the Central Development District with
modifications as necessary. For example, the
City may deem 70’ heights too tall and reduce
accordingly. Alternatively, the City could also allow
70’ height for buildings set back a certain distance
from the road and lower heights along Canal Street.
This is a model SSU has applied for many of its and
buildings and could be emulated.
Parking requirements should reflect the best
practices, given the context of the location. Outside
of the Central Development, Salem’s parking
ratios are often higher than necessary for a
walkable, mixed-use neighborhood (even without
the presence of transit). MAPC recommends the
City create parking ratios specifically for the newly
created district (similar to how Central Development
has its own requirements) or change the parking
requirements applicable to all districts. The
ratios used for the modeling of the scenarios, 1.5
spaces per dwelling unit and 4 spaces per 1,000
square feet of commercial space, reflective of best
practices in suburban locations, provide a basis for
the City to create appropriate parking requirements.
Specific uses could have higher or lower ratios, as
appropriate. To the extent possible, parking should
be located in the rear or side of the building to
create a walkable district.
TOD Scenario
With construction of a station, the rezoned district
in Subarea 2 could be further expanded to capture
a greater amount of area, including the Univar
site and other parcels adjacent to the station.
In addition, the parking requirements could be
modified to be reflective of a more transit-rich
location. MAPC’s research suggests 1.0 parking
space per dwelling unit for residential uses
proximate to commuter rail stations is generally
appropriate. Commercial parking could be reduced
from 4 spaces to 2 spaces per 1,000 square feet of
developed space if the applicant can demonstrate
parking demand could be adequately met, e.g., in
locations along Canal Street with on-street parking.
See the Side Box on Beverly’s rezoning efforts
(page 77) for a potential starting point.
95
Figure 49. Future Zoning
EXPANDED
CENTRAL
DEVELOPMENT
DISTRICT
PHASE 1 NEW
TrOD DISTRICT
PHASE 2
EXPANDED
TOD DISTRICT
CONNECTIVITY
Safe, convenient multimodal access are critical
to the success of achieving the Study Area’s
development potential. Both downtown Salem
and the SSU campus continue to grow as activity
centers that anchor the each end of the Study Area,
potentially creating significant pedestrian, bicycle,
and vehicular traffic in the corridor. Accordingly,
even without a new commuter rail station, improved
connectivity will be needed to provide safer and
more convenient mobility.
Shared use path
One of the most important aspects for the Study
Area’s revitalization is construction of the shared
use path. Phase 1 of the project, running from the
north end at Washington Street down to St. Paul
Street, is currently under construction as part of a
larger Canal Street reconstruction project. Phase
2, which will complete the connection from the
existing path on SSU’s campus to the Phase 1
portion, is currently programmed on the 2018 TIP.
Bicycle facilities from the Study Area to
existing station
In order for the shared use path to be a viable
transportation option (as opposed to being
primarily a recreational path), it is important that
safe bicycle facilities be provided connecting the
shared use path to the existing station. The City
is currently working with Toole Design Group on
assessing on-road bicycle facilities throughout the
downtown. Connecting both the shared use path
and the existing Lafayette Street bicycle lane via
a network of on-road bicycle facilities should be
prioritized.
Additional complete streets improvements
As noted previously, the local access score showed
a high travel demand for pedestrian and cyclists on
Canal Street, Loring Avenue, Lafayette Street and
Jefferson Avenue. In addition to the Canal Street
improvements, MAPC recommends complete street
improvements to Loring Avenue between Canal and
Lafayette Streets. Loring Avenue provides a critical
connection between Lafayette Street (the main
north-south thoroughfare in the area) and the SSU
campus. Bicycle lanes, consolidated curb cuts,
and better crosswalks will provide a safer route for
students to SSU, the Horace Mann School, and to
the bicycle and pedestrian network improvements
along Canal Street that connect with the South
Salem commuter rail station.
Bike share
Salem has recently begun a bike-share share
system operated by Zagster, Inc. with support from
Blue Cross Blue Shield of Massachusetts and SSU.
The bike share option initially had three stations
with three additional stations added during this
summer. As the Study Area develops, the City
should consider adding additional stations where
appropriate.
Optimize SSU shuttle service
The City of Salem and SSU should consider a
partnership to create a locally operated transit
system that could better link the rail stations,
downtown, and the various SSU locations. An
initial step could be a simple arrangement whereby
the SSU shuttle allows non-students to board for
a nominal fee. There is currently an SSU stop on
the southern end of the Study Area. An additional
96
stop on Canal Street in Subarea 2 could capture
additional users, including new residents and
students.
TOD Scenario
Crosswalk
The new commuter rail station and proposed east-
west pedestrian connection will create significant
pedestrian and bicycle activity along Canal Street at
the station. MAPC recommends a clearly marked
crosswalk on Canal Street at the station. This
crosswalk could be located near Roslyn Street,
which would provide a strong east-west connection
to Lafayette Street and the proposed bicycle route
near the shore. The City could consider rapid flash
beacon to further improve pedestrian safety if
needed.
Bus routes
Once the South Salem commuter rail station is
constructed, the City should work with the MBTA
on revising the routing of either bus 455 or 459 to
travel along Canal Street with a stop at the station.
SSU should also add a stop for the existing shuttle
that travels between downtown and the campus.
Ultimately, the City of Salem and SSU should
consider a partnership to create a locally operated
transit system that could better link the rail
stations, downtown, and the various SSU locations.
This new transit arrangement could be developed
by creating a city operated transit system, or
by operating shuttles via the existing North
Shore Transportation Management Association
(TMA). The TMA option could also leverage other
TMA funds to extend transit options such as
carpooling, and if jointly funded by other adjacent
municipalities, could include regional shuttles
linking employment to residents and students.
(This would be similar to the current operations
of the Crosstown Connect TMA that operates
both employer sponsored and regional public
transportation shuttles in Acton and Maynard.)
These new transit options can be explored prior
to the opening of the South Salem commuter rail
station.
Additional bike share station
The commuter rail station would be an ideal spot
to add an additional bike share system, providing a
critical first/last mile connection.
ECONOMIC DEVELOPMENT
The following recommendations focus on the
economic development in the Study Area,
providing a multi-pronged strategy for maximizing
market potential.
Find alternative locations for some industrial
uses
The City should consider the industrial uses that
are currently in this Study Area and how they can
best co-exist within a mixed use neighborhood.
Lighter industrial operations may be able to
function easily within a mixed-use neighborhood.
However, heavier uses may not be compatible
(particularly with residential) and future planning
should take this into account. It is important to
think through ways that the jobs provided by these
industries can be preserved while also creating
re-investment in the neighborhood by encouraging
residential and mixed use development. Industry
can often provide good jobs at lower levels of
educational requirements, which is relevant from a
jobs equity standpoint.
The City should reach out to industrial property
owners in the area to understand more about the
land use needs for these businesses and how this
can be integrated into planning processes in South
Salem. These industries may need larger lots for
production, storage of equipment and materials, or
loading and unloading. They also likely need good
access to regional transportation network such as
highways and arterial roads that are important for
reaching markets and customers.
Consider redeveloping city-owned sites within
the Study Area
The DPW could potentially be re-located to a
different site in the City, changing the industrial
character of this part of the Study Area. If this
occurs it would be an opportunity to kick-start
development in the area. The site is within
reasonable walking distance to the existing
commuter rail station and the existing Downtown.
It would be particularly well-suited to development
that included all or part affordable units.
The City may wish to discuss options and resources
with MassDevelopment, which has worked with
other communities who are interested in similar
relocations.
Attract businesses that could benefit from
proximity to a major hospital or University
Consider a partnership with the Enterprise Center
at Salem State University to seed businesses that
participate in the Enterprise Center’s programming
RECOMMENDATIONS
97
into available office/retail spaces within South
Salem.
A co-working space or innovation center developed
in partnership with the Enterprise Center could
also help to bring additional business activity to
the area. There are a number of groups in Salem
that work to support the business community
that could participate in this type of endeavor,
including the Salem Partnership, Salem Chamber
of Commerce, Enterprise Center at Salem State,
and Small Business Development Center. This
network of supportive organizations would be
attractive to future commercial tenants and should
be capitalized on in any marketing campaigns to
bring more businesses to the area.
Activate this area through creative retail and
events
Once development begins to occur, introducing
pop-up restaurants and retail in some of the large
parking lots or vacant sites is a good way to test
the retail market in the area. Creative events like
food truck festivals could bring more people into
the area and also be incorporated into ongoing
planning processes for South Salem.
The City can reach out to some of the industrial
operations in this area to see if they would be
interested in adding a retail component to their
operation that might help to enliven the area
and attract additional activity. There is already a
brewery and a distillery in this area. Building on
these existing assets, there may be some potential
to add additional establishments of this type.
TOD Scenario
Univar site redevelopment
As a key parcel adjacent to the future commuter rail
station, the City should pursue conversations with
the owners of the Univar site to keep them informed
of ongoing planning processes in South Salem and
to work to integrate them into the planning process
as redevelopment in the area begins.
Attract health services uses
Focus existing business attraction efforts on
businesses within the health services cluster that
could benefit from the proximity to North Shore
Medical Center. Examples of businesses within this
cluster might include home health care facilities,
labs, drug stores, or optical goods for example.
MANAGING NEIGHBORHOOD
CHANGE
The benefits of a strengthening market are
myriad, as indicated throughout this report,
but strategies are needed to ensure they are more
equitably distributed than they otherwise would
be in a free market, and that not only newcomers
but also existing residents have the opportunity
to take advantage of them. Tenant protections,
housing preservation and production, and the
amount of subsidized housing can be strong tools
to retain existing residents and avoid replacement
or displacement. The following are strategies to
better maintain Salem’s socioeconomic diversity as
the city’s residential market continues to improve
with infrastructural investment, increasing housing
demand, and new development.
Facilitate a robust housing production and
preservation strategy
The City should demonstrate a commitment to
maintain and increase the diversity of housing
types and price points. Given that 41% of Salem’s
2,465 Subsidized Housing Inventory (SHI) units
could expire between now and 2035, it is vital that
the city work with owners of expiring-use properties
and subsidy providers to renegotiate terms. The
MA Department of Housing and Community
Development regularly updates the SHI. The
City can monitor those properties approaching
expiration and conduct outreach to their owners
so that they’re aware of their option to maintain
affordability and how to do so.
At the same time, the City can work with the
development community to attract market-rate
residential projects that range in scale, housing
type, and unit size. Creative re-use to large-scale
development to smaller townhouse or rowhouse
projects, and rental projects in particular, should
all be considered. In addition, the City can support
the efforts of the local community development
corporation and other affordable housing
developers to increase the supply of deed-restricted
housing.
Prepare for land prices to rise through smart
acquisitions and partnerships
This analysis provides evidence that land prices
are rising in Salem and will continue to do so in the
coming years with new infrastructural investment
and increased housing demand. As land prices
rise, development costs will also increase. Without
intervention, new housing development will be
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unaffordable to lower-income households. Before
new infrastructure goes in or rezoning occurs, while
land values are still relatively low in the area, the
City should consider strategies that will facilitate
future affordable housing development in the area.
The City should also assess the feasibility of
acquiring additional sites in the area, before
rezoning incentivizes property owners to increase
sale prices. One strategy to do this is land
banking. Land banks are typically created as public
entities by local ordinance or allocated to existing
entities, such as planning departments or local
housing authorities. They are designed to acquire
properties, sometimes hold them tax free, and
negotiate sales based not on the highest bid but on
development proposals that meet planning goals.
Low land acquisition costs allow development
of below-market rate housing, and relieve the
pressure to develop for the “highest and best” use.
The City can facilitate this by removing land from
the private market while it is still affordable, and
influencing what development takes place at those
sites.
Adopt an inclusionary housing policy
Inclusionary zoning is an effective and predictable
way to increase affordable housing stock. As
the residential market in the city continues to
strengthen, and new housing opportunities are
created in South Salem, this tool can leverage
market-rate multifamily housing development to
better meet housing need. Salem should adopt
a city-wide inclusionary zoning ordinance to
ensure that new sizable market-rate residential
development includes a minimum percentage of
affordable units. Based on the market analysis, the
City should determine, or work with a consultant to
determine, the appropriate project size threshold
that triggers the inclusionary policy, set-aside
requirement, developer incentives, and other
components.
Adopt a condominium conversion ordinance
In strong housing markets composed mainly of
rental housing stock, demand from higher-income
populations for ownership housing incentivizes
landlords to convert their units from the former to
the latter. Because Salem’s housing is particularly
vulnerable to conversion, given not just its tenure
but also its age and scale, the City should adopt
a condominium conversion ordinance to protect
tenants of rental housing when the property owner
proposes to convert units to condominium or
cooperative ownership, or to gut or demolish the
structure.
The ordinance provides for various tenant rights
and landlord duties and obligations. First and
foremost, the ordinance stipulates the percentage
of units that may be converted city-wide within a
calendar year. Rental units cannot be removed
from the market without a removal permit, typically
issued by the Planning Board after an application
process. The Board often considers the benefits
to the citizens of the city issuing the permit, the
hardships imposed on the tenant, the potential for
relocating the tenant to comparable housing in the
city, amongst other factors. The ordinance also
governs tenant notification of a conversion with a
given timeline. It provides the tenant with the right
to purchase the unit after conversion. Should the
tenant decide instead to relocate, the ordinance
requires the landlord to provide reimbursement for
moving costs.
Raise funding for affordable housing
There are several strategies the City can implement
in order to raise resources to support affordable
housing production and preservation. First,
Salem should consider raising the Community
Preservation Act (CPA) surcharge on property taxes.
Salem voters adopted CPA in 2012 in order to raise
revenue for historic preservation, open space and
outdoor recreation, and affordable housing through
a surcharge of 1%. This surcharge can be as high
as 3%. Salem should consider a slight increase
to 2% in order to raise additional funds for CPA-
allowed activities.
Second, should the City adopt an inclusionary
zoning ordinance per the above recommendation,
it will likely include a payment in lieu of units (PILU)
option for developers who can’t feasibly include
on- or off-site affordable units. These funds are
typically calculated to reflect the cost of residential
market development at the time. They should be
used to advance affordable housing activities and
can be allocated to the local housing authority, local
community development corporation, or other ally.
All resources raised for this purposes should be
directed to the City’s Affordable Housing Trust Fund
(AHTF), established in 2006, to ensure they’re used
to create and preserve affordable housing.
Use Developer Agreements and Community
Benefits Agreements
As markets heat up, municipalities find themselves
in a position to negotiate with the development
RECOMMENDATIONS
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community for the public good. Towards that
end, Salem should adopt a standard articulating
City values for negotiating with developers to
generate resources and amenities that advance
equity, specifically affordable housing. There are
two primary ways to do this. The first tool is the
developer’s agreement. This is a contract entered
into between a municipality and a property owner,
typically the developer, that provides the latter with
certainty that their project will be immune from
zoning changes over the course of development
in exchange for benefits to the city, such as
infrastructure improvement or monetary payments.
The second tool is a Community Benefits
Agreement (CBA). This is a contract signed by
a community group or a coalition of community
groups and a real estate developer that stipulates
the latter will provide specific benefits and/
or mitigations to the community in which new
development is occurring. It is a tool intended to
empower those traditionally left out of the planning
process for their own communities. Benefits
could include green building requirements, public
space, and, as is recommended here, inclusion of
affordable housing.
Consider adopting just cause eviction
controls
Increased housing demand from a higher-earning
demographic can incentivize landlords to raise
rents or even evict current tenants in order to
replace them with new ones that can afford higher
housing costs. Just Cause Eviction Controls (JCEC)
deter landlords motivated to evict tenants to raise
rents by requiring them to identify a proper reason
like failure to pay rent or destruction of property.
Salem has significant populations of those
typically most prone to eviction: low-income and
fixed-income households, people of color, and
the elderly. JCEC can protect these tenants
from discrimination while also curbing rapid rent
increases by preventing high rates of turnover—
an important strategy for preserving affordable
housing in emerging housing markets. This
stabilization of the community during periods
of growth ensures that existing tenants benefit
alongside developers, landlords, and newcomers.
Salem should first assess and, if needed, foster
community and political support for JCEC. In
order to implement and enforce such a policy, the
City will need both local and state approval. In
Massachusetts, landlord-tenant relationships are
usually regulated by the State, so the City must
submit a Home Rule Petition to the state legislature
to secure regulation authority over the JCEC. The
policy must also be adopted by City Council.
Monitor impacts of neighborhood change on
vulnerable populations
The City of Salem should identify and monitor
benchmark indicators on demographics and
housing in order to evaluate the efficacy of
managing neighborhood change strategies
recommended herein, and revise as needed in
response to shifting trends. If it is determined
that unfavorable changes are occurring within
the City’s population composition, the regulations
recommended above can be strengthened. For
example, an inclusionary zoning policy with a 10%
set aside can be increased to 15% as the market
the strengthens, or the project size threshold that
triggers the policy can be lowered, or a district-
specific policy can be made city-wide.
TOD Scenario
Raise affordable housing funds through
payment-in-lieu for parking reductions
With a commuter rail station, the City should
consider allowing developers to pay a fee in lieu
of providing parking on site. The City may be able
to consolidate parking in centralized public lots
or structures, perhaps on city-owned land like the
DPW site if that use is relocated. In such cases,
developers would build less on-site parking, and the
resources saved on parking would be flagged for
advancing affordable housing goals.
PUBLIC HEALTH
There are a number of strategies that the City and
its partners could take to enhance the overall
positive impacts associated with the changes
to the South Salem area. Wherever possible,
recommendations are based on evidence that have
been shown or associated with a proven effect.
Where evidence does not exist, MAPC proposes
that the city set up a monitoring program in order
to determine if strategies are having the intended
effects.
Introduce new publicly accessible green
space
Green spaces like parks and plazas that offer
trails and outdoor exercise facilities have been
associated with increases in physical activity. In
addition, they are associated with increases in
social connections and mental health benefits,
such as decreased stress.
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Remediate existing hazardous materials on
properties
As a site with former industrial uses, remediation
measures must be undertaken to minimize
and eliminate potential exposure to hazardous
materials. Likely this would inherently be part
of any redevelopment, but it is important to
reinforce given known linkages between hazardous
materials and poor health conditions and
outcomes.
Lower target vehicular speeds and introduce
traffic-calming measures
Lower traffic speeds are associated with fewer
injuries and deaths from traffic-related crashes. If
new on-road connections are established, streets
should be designed with a target speed for 25
mph or less in order to reduce safety risks and
encourage other modes of travel. If streets are
designed for higher speeds, separated facilities for
walkers and bicyclists should be provided. Vision
Zero (visionzeronetwork.org) provides background
and more guidance on implementation of this
approach.
Introduce housing at a range of price points
The benefits described in the Neighborhood
Change section of providing affordable housing
extend to public health. Housing stability and
security are essential for a health community.
When householders are cost-burdened, they can
be forced to choose between housing payments
and other expenses such as food, medical care,
and utilities. In addition, children in unstable
housing are also at risk of malnutrition and
RECOMMENDATIONS
developmental delays that can have lifelong health
consequences. Early steps to ensure housing
for a variety of situations in a new neighborhood
development will address these risks.
Encourage the introduction of public markets
to increase access to fresh food; Explore
potential for community gardens in multi-
family developments
A number of Salem’s health issues are connected
to diet. Crosby’s Marketplace offers a number
of healthy choices, such as fresh produce.
Connections to this store in a multi-modal manner
should be enhanced as new development occurs.
In addition, to increase access to, and consumption
of, fresh foods, community gardens can be
permitted to increase local fresh food production.
Model zoning language can be found in Municipal
Strategies to Increase Food Access, Volume 2 of the
Healthy Community Design Toolkit.22
Consider local hiring policy and
encouragement of new local small
businesses
Consider local hiring laws and wage protections
(e.g., living wage ordinance) to promote local
employment practices in order to include local
residents in economic development benefits
and build local wealth. Additionally, local small
business generally have strong economic ties to
their communities. Their presence is associated
with economic growth and local investment and
they are more likely than larger companies to
reinvest their profits locally.
Target area for community-based
programming to increase physical activity
The installation of more facilities for active
transportation in combination with traditional
neighborhood development designs are important
and recently have been cited by the Centers and
Disease Control and Prevention as recommended
interventions to increase physical activity. In
addition, programming such as walking clubs for
older adults have been shown to help specific
populations become more active. Changes to
South Salem should include both investments to
increase walking and biking facilities as well as
programming to get more residents involved in
being physical active.
22www.pvpc.org/projects/food-access)
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Despite the many benefits, a key barrier to constructing a commuter rail station
in South Salem is securing funding. AECOM estimates that construction
of the station will cost approximately $24 million, including additional needed
track and signal work. MAPC undertook an analysis to determine the possible
changes to property tax receipts resulting from projected possible changes in
development in the South Salem area. This analysis can serve two purposes:
1. Provide a measure of the economic impact under the TrOD and TOD
scenarios
2. Provide a first step for determining a potential value-capture strategy to
help fund the cost of station construction.TAX IMPACT ANALYSIS
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TAX IMPACT ANALYSIS
MBTA EXPANSION PROJECTS
MassDOT’s capital expenditures focus on three
priorities:
»Reliability
»Modernization
»Expansion
MassDOT devotes the bulk of its resources on
fixing and modernizing transportation assets that
have been allowed to deteriorate or that fail to
meet customer needs and requirements. Securing
projects related to system expansion comprise a
small portion of MassDOT’s capital improvement
plan, thus making them highly competitive.
Expansion projects focus on the following goals:
»Addressing unmet demand with increased
service
»Promoting economic development
»Providing more equal access and opportunity
»Meeting environmental goals by reducing
automobile congestion.
In the post-Big Dig era (i.e., since 2013) the MBTA
has committed or begun construction on several
capacity expansion projects, including:
»CapeFlyer
»Assembly Station (orange line)
»Green Line Extension
»Wachusett Extension
»Silver Extension to Chelsea
»Boston Landing Station (Brighton)
»West Station (Allston)
VALUE CAPTURE OPTIONS
MassDOT’s universe of capital improvement
projects includes more than 3,700 unfunded
projects (345 expansion projects). Given that
demand far exceeds available state funding, it
is increasingly important for communities to find
creative ways to fund expansion projects. The City
may consider applying various “value capture”
tools, whereby a public agency “captures” a portion
of the increased property values to help pay for the
infrastructure itself.
Table 45 provides a generalized description
of various value capture tools authorized in
Massachusetts.23
Value capture is not a strategy that can be applied
to every TOD project; however, South Salem
contains many of the elements typically associated
with strong value capture potential:
»Strong real estate market
»Significant development potential
»Project creates significant value for nearby
properties
»One jurisdiction
»Strong municipal fiscal position
»Political support and municipal capacity
»Projected revenues of sufficient scale to
justify transaction costs
Other elements include few property owners (this
element could be more of a challenge for South
Salem) and the availability of other funding sources
(unclear at this point).
Not all of the tools summarized in Table 45 may
be appropriate for South Salem. For example,
although the MBTA owns a large parcel of adjacent
property, which could generate significant revenue,
as previously discussed, the MBTA’s current
position is to hold on to its property for future
operational functions. I-Cubed requires a certain
threshold of new jobs being brought to the area
and given the limited market potential for new
commercial on site, that program could also be a
challenge. LIDP requires 100% of property owners
in the district to agree to a special assessment to
fund infrastructure, a potentially insurmountable
obstacle (the program has never been used in the
State).
Potentially more feasible options could be
the establishment of a DIF and/or developer
contributions.24 A DIF is a locally driven public
financing alternative available to all cities and
towns in the Commonwealth. The DIF program
enables municipalities to finance public works
and infrastructure projects in a designated
area by “capturing” the increase in property tax
revenues, or tax increment, derived from new
housing, commercial or industrial activity in the
designated area and applying the revenues towards
the municipality’s development program. A tax
increment is the difference between the beginning
assessed value of the targeted property in its
dilapidated state and the assessed value going
forward in time, as the planned improvements take
shape. The tax increment, calculated by the local
Assessor, is the tax on the added value of new
construction, rehabilitation or new equipment or
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machinery. Using DIF, municipalities can pledge
all or a portion of tax increments to fund district
improvements over time.
DIFs have been used fewer than 10 times in the
state, but can be used to pay for a wide range of
infrastructure improvements, including transit
stations. The recently established DIF in downtown
Brockton is an example of one that has been
implemented in a larger district covering multiple
properties with different owners.
Table 45. Summary of Massachusetts value capture options
Notes:
1. In Massachusetts, the term “tax increment financing” is typically used to refer to tax abatements provided to developers or
employers in order to promote economic development. DIF is a more traditional form of TIF, in that it is intended to capture
incremental growth in municipal property tax revenues in order to fund public improvements.
2. I-Cubed also includes a special assessment district component.
3. Impact fees are subject to significant legislative restrictions.
23 For additional information, please refer to Expanding the Use
of Value Capture for Transportation and TOD in Massachusetts.
January 20, 2017. Prepared for MAPC, City of Somerville, Barr
Foundation, and A Better City by Strategic Economics.
24 Refer to A Guidebook of Massachusetts’ Public Financing
Programs for Infrastructure Investment (by Margaret Keaveny)
for additional information.
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TAX IMPACT ANALYSIS
ESTIMATION OF FUTURE LOCAL
TAXES
Assumptions
Using the development potential from a “Do
Nothing,” TrOD, and TOD scenarios, MAPC
estimated the potential future tax receipts. In
addition to the assumptions developed to create
the various scenarios, this analysis includes a
number of additional assumptions.
Average building value per square foot
MAPC utilized averaged assessed building values
for all properties throughout the City of Salem and
segmented them into the various uses assumed
for the future development of the Study Area
(see Table 46). This data was used to project the
value of future development of each building type.
Existing land values for the Study Area were utilized
as a proxy for future land value.
Table 46. City of Salem Average Building Value / Sq’
Table 47. Local Tax Impacts
Tax Rates
Salem uses a split tax rate for residential properties
(FY2017 rate: $15.86 per $1,000 assessed value)
and commercial/industrial/personal property
(FY2017 rate: $29.99 per $1,000 assessed value).
The FY2017 rate was applied for all future years to
the projected assessed building values.
Other assumptions
MAPC assumed a 15 year timeline for each of the
scenarios.
MAPC assumed absorption, i.e., the amount of
newly constructed square footage that is added
to the Study Area each year, to be a flat rate. Flat
rate absorption assumes the same square footage
comes online each year. This is a simplifying
assumption – real estate will go through cycles, and
economic factors beyond the new train line will play
an important role in dictating market demand.
A discount rate of 5% was applied to capture
the present value of future cash flows (i.e., tax
receipts). In discounted cash flow analysis the
discount rate takes into account both the time
value of money and the risk/uncertainty of future
cash flows.
The Do Nothing scenario assumes no
changes to zoning or implementation of other
recommendations. An inflationary factor of 0.5%
was applied to capture modest reinvestments in the
area over the 15-year time horizon.
Future Local Tax Analysis Results
Table 47 provides a summary of the results of the
analysis for local property tax receipts.
Under both the TrOD and TOD scenarios total tax
receipts are higher than under the Do Nothing
scenario. The TrOD scenario is only modestly
higher due to the shift from commercial to
more residential development. The effects of
constructing a station (TOD scenario), however,
is significant – almost twice as much property
tax revenue: $31.2 million versus $15.8 million
cumulative over the fifteen year timeframe.
107
ESTIMATION OF FUTURE STATE
TAXES AND JOB GENERATION
MAPC also created a model to project state tax
receipts and jobs created as a result of the
construction of a new commuter rail station in
South Salem. As with the local tax analysis, the
model takes key assumptions about the square
footage of new real estate that can be absorbed
by the market each year, and also forecasts
the building costs associated with this new
construction. As a caveat, as with most projection
models, the model relies heavily on assumptions,
which if altered can result in large effects. Using
relatively conservative metrics, this model offers
a snapshot of how public stakeholders might be
affected by investments in transit.
Assumptions
Additional assumptions for this analysis include:
Construction costs12
»Office: $270 per square foot
»Retail: $200 per square foot
»Residential: $270 per square foot
Job creation13
»Office: 4.0 per 1,000 square feet, $70,000
average annual wage (permanent)
»Retail: 2.0 per 1,000 square feet, $25,000
average annual wage (permanent)
»Construction: 0.8 per $100,000 of new
development, $50,000 average annual wage
(temporary)
12 The Greater Boston Housing Report Card. 2015.
Northeastern University Dukakis Center
13 Source: Assembly Row I-Cubed Program
MA Tax Rates
»Income tax: 5.60%
»Sales Tax: 6.25%
Future State Taxes and Job Creation
Analysis Results
As Table 48 summarizes, there is a strong
economic impact for the State, resulting in
approximately $23 million over the 15 year
development period.
More than 90 construction jobs per year could be
generated by the new development and more than
500 office and retail jobs over the development
period.
Table 48. Potential State revenue from construction of South Salem Station
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TAX IMPACT ANALYSIS
IMPLICATIONS OF THE ANALYSIS
The analysis indicates that constructing a station would have a strong economic impact for both the City and
the State and generate numerous temporary and permanent jobs. The City could consider the differential
local tax impact of constructing a station, approximately $15 million according to this analysis, as a starting
point for considering establishment of a DIF.
Given the approximately $24 million required to construct a new station, other sources of funding may also be
required. For example, SSU and/or NSMC, as well as the City of Salem itself, could potentially provide funding.
The cities of Cambridge and Somerville have established the precedent in municipalities helping to fund transit
expansions through their contributions for the Green Line Extension. If a large enough initial development
parcel could be identified, the City could also partner with a developer for part of the construction costs. The
newly constructed Boston Landing Commuter Rail Station in Allston, MA is an example where the land owner
(New Balance) funded the construction costs. The City of Salem should work closely with the MBTA and its
stakeholders to explore innovative funding solutions to bring this important transit node to fruition.
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