Federal Reserve leaders visit Mass. city to learn about economic conditions Federal Reserve leaders visit Mass. city to learn about economic conditions

Working Cities leaders share lasting successes, housing experts discuss challenges and opportunities Working Cities leaders share lasting successes, housing experts discuss challenges and opportunities

June 26, 2024

Leaders from across the Federal Reserve System visited Chelsea, Mass., on Monday to learn about local economic conditions, and hear about the lasting impacts of the Federal Reserve Bank of Boston’s Working Cities Challenge.

The Fed contingent, including Reserve Bank presidents and first vice presidents – Boston Fed President Susan M. Collins and First Vice President Karen Pennell among them – met with Chelsea residents and community leaders. They also toured the downtown of this majority Hispanic/Latino city of about 38,000, located just a few miles from Boston’s financial district.

During a panel discussion about Chelsea’s economic progress, longtime resident José Agustin Iraheta Zaldaña said Chelsea is a place where local groups come together for collaboration and support. But it’s also dealt with poverty, high crime rates, and substance use, said Zaldaña, co-director of community building for the nonprofit The Neighborhood Developers, which hosted the visitors.

In 2014, Chelsea received a three-year grant of $250,000 through the Boston Fed’s Working Cities Challenge. The challenge, part of the Working Places initiative, focuses on promoting economic development in smaller, post-industrial cities. Zaldaña said community members set a goal to reduce crime by 30% over the next decade.

“By 2017, we met our goal. … We can’t credit everything to Chelsea Thrives (the Working Cities Challenge team), but we can definitely say it contributed,” he said. “We look at the bad, but also the good – and how we can improve our communities in a systematic way, where all our partners can work together.”

Fed leaders learn about Working Cities Challenge success

Fed leaders learned about “The Hub,”  the focus of the Chelsea Thrives’ crime reduction efforts, during a panel discussion moderated by Boston Fed Community Affairs Officer Prabal Chakrabarti. Chelsea Thrives collaborated with local groups and the police department to create this network of social service, police, and community agencies. Its goal is to support at-risk residents to prevent crime and other emergencies.

A Working Cities team member from another part of Massachusetts also told the Fed officials about the program’s impact. Mark Dohan, executive director of nonprofit NewVue Communities, spoke about the initiative’s work in Fitchburg, about 50 miles northwest of Boston. Starting in 2014, the Working Cities team focused on revitalizing the North of Main neighborhood, which was marked by poverty and a lack of job opportunities.

Dohan said Working Cities helped community members unite around a vision of the neighborhood as a “gateway to arts and culture,” to make it more attractive to residents, businesses, and investors.

Today, parts of the historic downtown have been rebuilt, construction of a new library is ongoing, and public art is on display. The changes have sparked the creation of many new resident-owned small businesses, Dohan said.

“One of the things the Fed has helped us to do is ingrain this change into our community,” he said.

A visit to a new affordable housing development and strategies for combatting housing crisis

The Fed leaders  began their visit with a tour of 25 Sixth Street, a former industrial site. The Neighborhood Developers is constructing 62 affordable housing units there – including 56 rental apartments and six townhouses for first-time homebuyers. The development is expected to be completed later this year.

The regional housing crisis was the focus of a panel moderated by Tamar Kotelchuck, a vice president of Regional & Community Outreach at the Boston Fed. She encouraged the panelists to speak about strategies to address housing issues, as well as any “bright spots” of opportunity they see.

Rafael Mares, executive director of The Neighborhood Developers, talked about his organization’s work to keep rents affordable. He said that besides building new affordable housing, the nonprofit also tries to acquire for-sale properties to prevent drastic rent increases.

He said local landlords often keep rents relatively low, but when the time comes to sell the property, they base their sale price on much higher market-rate rents. That means the new buyer will have to raise rents to market-rate to make the purchase worthwhile, Mares said.

“We’re trying to intervene by getting in there and acquiring those properties before that happens,” Mares said.

Chrystal Kornegay, CEO of MassHousing, said that New England’s housing crisis is similar to what’s going on nationally, where the rent burden is “inching up the income brackets.”

“We’re having to think about a housing system that isn’t just affordable for our lowest-income folks, but across the spectrum,” she said.

Rachel Heller, CEO of the Boston-based Citizens Housing and Planning Association, said state and local government levels are working to address the housing crisis, and public attitudes toward affordable housing are shifting as the crisis impacts more people.

“We’re changing the conversation at the local level, and that is really what will make a big difference,” she said.

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