Boston may be the Massachusetts city most people think of when the issues of low vacancies, high rents and a hot real estate market are brought up, but those working in the real estate industry in the state’s second largest city say things aren’t much better there.

Residents looking to escape the Boston market have been heading west to Worcester, crowding into an apartment market that was beginning to heat up on its own anyway, real estate agents say. Those extra apartment-seekers, combined with a dearth of new units being added to the housing supply, are making for a tight squeeze in the city’s rental market.

“It’s almost as tight as the Boston market,” said Sandra Katz, a Realtor with Realty Systems Residential in Worcester. “The prices are not quite as high; they’re somewhat more affordable. But the higher the prices go in Boston, the more people come our way.”

Katz, who manages approximately 200 rental units in the Worcester area, said in today’s market she receives between 25 and 30 calls every day from people looking for apartments. “I get that many, and I don’t even advertise,” she said. “If I did, I’d probably be doing nothing else all day except answering phones.”

She added that, at times, she has had hopeful apartment hunters lined up outside the door when she arrives at her offices.

“And there’s also demand in places you would have never expected demand before,” she said, referring to apartments located in what previously were considered by some to be undesirable neighborhoods. “Now, we’re getting them on a waiting list.”

“It’s very tight,” added Terry Anderson, director of real estate development for the Oak Hill Community Development Corp., which serves the Oak Hill, Union Hill and Vernon Hill neighborhoods of Worcester.

Among other programs and services, the CDC works to acquire and rehabilitate distressed properties, in many cases triple-deckers, and turn them into homeownership opportunities with rental units for income.

When a property is being rehabilitated and the CDC puts a lawn sign in front of the building, “We’re flooded with calls from potential tenants,” Anderson said. As an example, at a triple-decker at 84 Providence St. that the organization recently renovated, the CDC receives at least a call a day about the property from tenants who want to live in the rental units, he said.

“The buyer market is intense as well,” Anderson added. “At 84 Providence, within two weeks, we had four offers. We ended up having to have a lottery.”

Katz attributed part of Worcester’s market conditions to the city’s accessibility to Boston. “It’s more affordable, less hectic, and you can get [to Boston] by train,” she said.

Also, she added, “We haven’t had any new building going on.”

Katz said monthly rents in Worcester currently range from $800 to $1,000 and higher for a three-bedroom unit, $600 to $725 for a two-bedroom unit, $450 to $525 for a one-bedroom unit, $425 to $475 for a studio and about $90 per week for a room in a rooming house. The greatest demand currently is for three-bedroom units.

Though still significantly lower than prices in Greater Boston, she said that market rents have increased dramatically from just a few years ago.

Another contributing factor in Worcester’s market is the abundance of colleges in the city and the corresponding number of students that need housing.

“There’s a burgeoning college population,” Katz said, adding that property owners are sometimes reluctant to rent to students. “And we’re going to be facing an even bigger crisis in the next few years when the Massachusetts College of Pharmacy comes on line adding another 500 students.”

But just because there are no new units being constructed does not necessarily mean there are no units in the area that could be brought on line. Despite low vacancy rates and increasing rents, many apartments in Worcester, and in other cities, remain empty. Katz referred to these as “hidden apartments.”

“We did an unscientific survey a few years ago of people who have apartments but will not rent them, and we found close to a thousand,” she said, “and I can guarantee the number has increased since then.”

“We have a lot of units that are kept empty by their elderly owners,” said Joan Geissler, president of the Worcester Property Owners Association and the United Lodging House Association.

“The majority of [the units] are great, but most of the time it’s a three-decker, and an elderly person lives owns the building and lives in the first unit, and they don’t rent out the second or third unit,” she continued.

‘Free Ride’
The reasons for not renting the units cited by Katz and Geissler are that the owners are too scared to rent to tenants they don’t know combined with laws they say are stacked against the property owner.

“They think: ‘I paid my mortgage. Why should I put up with someone who’s not going to pay me rent?” Geissler said.

“Why would an elderly person want to take the risk?” asked Katz. “I know a lot of people out there who are not going to rent unless its someone they know and trust.”

Anderson agreed that if more hidden apartments were brought back into the housing stock, it would put a dent in the problem of lack of available units. To that end, he said his organization is working to launch a program to address the situation.

“The program is designed to help senior owner-occupants of multifamily buildings,” he said. “In a lot of cases, the owner is the only one living in the building.

“They’re reluctant and a little frightened to deal with tenants, so they don’t rent the units,” he continued. “Our program works with the owner to help educate them and help them in the area of tenant relations. Hopefully we can bring some of these back on line and get these units filled.”

Geissler said more units would be added to the housing stock – both newly-constructed units and so-called hidden apartments – if the state Legislature passed laws that provided some benefit for developers and property owners who wanted to bring in more units.

“They’re hoping some of the laws will be changed before they rent out units,” Geissler said of some property owners. “If we had better laws – or at least something that was more in the middle – we would start seeing tenants take more responsibility and they would know they can’t get away with a free ride from their landlords, which is such common knowledge now.

“It’s not that we don’t have the housing, but it’s just that the housing is not being put on the market,” she continued.

Katz, who is co-chair of the Government Affairs committee of the Greater Worcester Board of Realtors, said property owners are also waiting for the passage of a rent escrow bill and more relaxed lead paint requirements before putting existing units up for rent or constructing new units.

For the Oak Hill CDC’s part, Anderson said his and other organizations would continue to rehabilitate distressed buildings to add to the housing stock wherever possible. “More money is always welcome, regardless of the source,” he said of funding for new housing.

In the meantime, agents will continue dealing with the market, which has been hot in Worcester for about the past two or three years.

“By the end of the month,” Katz said, “it’s been so busy that I just want to leave the state.”