FOR IMMEDIATE RELEASE 06/15/2025

For further information, contact:

Susan Scully Petroni

City of Framingham Public Information Officer

spetroni@framinghamma.gov

508-782-8629

Framingham’s Central Business District Remains Viable for Multifamily Development, Economic Feasibility Analysis Confirms

FRAMINGHAM - A newly completed Economic Feasibility Analysis (EFA), commissioned by the City of Framingham and conducted by the MetroWest Economic Research Center at Framingham State University, confirms that multifamily residential development in Framingham’s Central Business (CB) zoning district is financially viable, even with the city’s 13% inclusionary zoning requirement.

 This analysis is a critical step in helping Framingham meet full compliance with the Commonwealth of Massachusetts’ MBTA Communities Act. The City has received provisional compliance with the state law, and the full report was made available to the City last week.

The study explores the financial feasibility of new multifamily projects under both existing and proposed regulatory conditions, examining a range of development scenarios from 10 to 250 units. The findings underscore Framingham’s ability to meet housing goals while remaining an attractive location for developers. The report demonstrates that projects of all scales can achieve a positive return on investment, with Internal Rates of Return (IRR) ranging from 15.14% to 16.75%, and Return on Cost (ROC) ranging from 6.07% to 6.31%. These figures are well within the industry-standard thresholds for financial feasibility, confirming the city’s competitive edge in the market.

Key Findings of the Analysis:

1. Robust Feasibility Across Project Scales:
    The analysis confirms that both smaller (10–30 units) and larger (48–250 units) developments are financially feasible, with high IRRs and ROCs across all project types. Even projects that meet the city’s inclusionary zoning requirements for affordable housing remain profitable.
2. Minimal Revenue Impact of Affordable Housing Requirements:
    The inclusion of affordable units, which is a key element of Framingham’s zoning law, has a limited impact on overall project revenue. The affordable housing set-aside (11% at 80% AMI and 2% at 60% AMI) results in only a modest reduction in gross income across all project scenarios, ranging from 0.01% to 1.38%.
3. 80% AMI Units Are Largely Revenue-Neutral:
    Due to Framingham’s location within the Boston-Cambridge-Quincy Metro Area, the 80% AMI rent caps align closely with achievable market rents. As a result, the 80% AMI affordable units have minimal financial impact, allowing projects to remain economically viable even with the inclusionary zoning requirements.
4. Economic Resilience to Zoning and Regulatory Flexibility:
    Sensitivity analyses show that even under less favorable market conditions—such as reduced rent growth or increased parking ratios—Framingham’s CB District maintains strong financial resilience. In particular, projects that scale up to 100 units or more exhibit improving returns due to economies of scale.
5. Potential for Targeted Policy Tools:
    The analysis also tested the impact of a 25% property tax reduction as a potential policy tool, which demonstrated significant improvements in project returns, particularly for mid-sized developments. This highlights the opportunity for the City to implement tax incentives, such as a PILOT (Payment in Lieu of Taxes) agreement, to further enhance development feasibility.

Supporting the City’s Housing Goals:

The findings of this report demonstrate that with thoughtful design and careful zoning, multifamily development in Framingham’s CB District can be financially feasible at a scale that supports the community's housing goals. Furthermore, the analysis confirms that the city’s 13% inclusionary zoning requirement is economically viable under current conditions, ensuring that Framingham can meet its obligations under the MBTA Communities Zoning Law.

“The results of this analysis are a strong affirmation of our commitment to meeting the housing needs of our community,” said Mayor Charlie Sisitsky. “Framingham’s Central Business District continues to be a prime location for development, and this report shows that with careful planning and strategic investment, we can achieve both economic growth and affordable housing. The MetroWest Economic Research Center’s work provides a clear path forward and comply with the state’s MBTA Communities Act.”

“The findings from the Economic Feasibility Analysis will serve as a valuable tool as we move forward with our long-term planning goals,” said Sarkis Sarkisian, City of Framingham Planning Director. “This study demonstrates that Framingham is in a strong position to foster multifamily development that aligns with both local housing needs and state requirements. We are confident that we can maintain our momentum in supporting sustainable, inclusive growth across the city.”

The study, which includes comprehensive modeling and a review of local market data, offers a robust assessment of development conditions and provides valuable insight into how Framingham’s housing policies can be leveraged to attract new development while meeting the needs of the community

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