Economic bill offers greater Springfield small business and housing relief
Small businesses in Greater Springfield and across the state of Massachusetts have been decimated by the 2020 economic crisis. Some small businesses and restaurants are in ‘hibernation’ to wait out the crisis and reopen sometime in the future while far too many have already permanently closed. Hundreds of thousands of Massachusetts citizens remain unemployed, renters are being evicted, and many homeowners are unable to pay their mortgage. The federal relief bill finally signed by President Trump is welcomed relief albeit not nearly enough.
The recession began before the pandemic as indicated in the 2019 data. The weak underlying economic conditions will prolong the recession. More than 24,000 citizens remain unemployed in Greater Springfield and nearly 30,000 people have left the area’s labor force altogether and no longer counted as unemployed. Economic relief is urgently needed, and in low-income cities such as Holyoke and Springfield desperately needed along with small business resurrection.
Last month Governor Charlie Baker passed a $668 million Small Business Relief Package to help Massachusetts small businesses. To complement this effort the Massachusetts Legislature passed a $626.5 economic development bill, the bill is now on Gov. Baker’s desk.
Sen. Eric Lesser (D-Longmeadow), Chair of the Joint Committee on Economic Development & Emerging Technologies and Senator Michael J. Rodrigues (D–Westport) Chair of Ways and Means were developing a state economic development bill prior to the pandemic, the current bill is a six-legislator co-sponsored bill rewritten to further provide economic relief from Covid-19 with an eye on economic growth and job creation post-Covid-19.
Elements of this bill will be of special interest to Greater Springfield.
Consumer spending in Massachusetts increased 15% in 2020, while in Hamden county small businesses open fell by 32.6% and Hamden county small business total revenue fell by 29.5% in 2020.
There were approximately 1500 restaurants and drinking places in Greater Springfield in 2019, employing more than 26,000 people. We do not know how many of these establishments will be open in 2021, but liquor license renewal is expected to plummet and hundreds of these eating and drinking places permanently closed.
National Restaurant Association estimates 17% or 110,000 restaurants have already closed permanently across the nation. According the Massachusetts Restaurant Association, 91% of Massachusetts restaurants report sales volume being down, sales on average fell 43% in 2020; 89% expect their sales to decrease in the next 3 months. 45% of Massachusetts restaurants are considering temporarily closing until the pandemic is over and 49% say without additional relief funds it is unlikely their restaurant will still be in open in six months. Restaurants account for 7.6% of Massachusetts employment and 76% are independently owned small businesses. Although national unemployment has fallen to 6.7%, for restaurant workers it is a Depression-level 16.1%.
To help address small business urgencies in Springfield and across Massachusetts, the economic development bill titled, “An Act Enabling Partnerships for Growth,” provides $102.3 million toward local economic development projects and $30 million is available for loans to small businesses impacted by Covid-19. An additional $20 million is available to restaurants in the form of grants; and third-party delivery fees for meals are capped at 15% throughout the pandemic. The bill provides $35 million in loan-funding to promote small business development with an aim to enhance minority-owned and women-owned enterprises; $20 million for economic development in small, rural communities; and $25 million for low-income entrepreneurs desiring to start their own business but lacking access to regular banks loans.
Springfield educational institutions will appreciate the bill’s $15 million to expand capital grants for vocational and technical education, and an additional $15 million to support career-oriented programs and initiatives at community colleges. It provides provisions for Student Loan Bill of Rights pushed for many years by Sen. Lesser. The bill has $52 million available for science and technology research in Massachusetts.
Springfield museums and artists will welcome the bill’s $6 million to support local artists and museums and businesses of tourism, such as the Volleyball and Basketball Hall of Fames and MGM casino, will appreciate the $14 million to promote tourism in the Commonwealth.
Renter-occupation constitutes 59% of Holyoke and 54% in Springfield. 50% of Holyoke renters are cost burden or spend more than 30% of household income on housing costs; in Springfield 58%. 54% of Holyoke renters and 58% Springfield renters have household incomes below $25,000. Extreme low income increases the likelihood of being cost burdened.
The bill provides a plentitude of housing relief and development.
It fulfills Governor Charlie Baker’s housing production proposal aimed at spurring new housing production and cuts through red tape. It requires 10 percent of new construction toward affordable housing for extremely low income residents and includes a seal on no-fault eviction for renters, along with an increase in the low-income housing tax credit. It authorizes $50 million in the form of grants and loans for transit-oriented housing and the production of high-density mixed-income affordable housing near public transportation. Another $50 million aims to put vacant housing back to productive use for neighborhood stabilization. $5 million is aimed toward gateway cities, such as Worcester, to support shovel-ready housing opportunities.
The Massachusetts Legislator has passed an impressive economic development bill. The bill’s housing component aims at stabilizing home residency, both ownership and renter-occupied, this stabilizes community which helps stabilize employment and business activity which are necessary conditions for economic growth. The bill in conjunction with the legislation passed last month provides funding and incentives for small business development. This will further create jobs and employment for Massachusetts citizens and encourage a robust small business environment in cities such as Holyoke and Springfield.