In August, when Gov. Patrick signed H. 4377 (An Act promoting economic growth across the Commonwealth), it was overshadowed by other bills signed simultaneously, notably gun safety legislation. However, this Gateway Cities legislation marks a significant progression for real estate and community development in Massachusetts.

The bill designates $15 million for the state to allocate to development projects in Gateway Cities. While this represents a relatively modest level of stimulus, it can be viewed as a down payment on the future, and sends a clear message that these cities have unique economic needs, and are important and vital to the state’s continued economic success. From the many years WinnCompanies has spent investing in and redeveloping within these communities, it is clear that despite extraordinary need and strong market demand, significant real estate projects in these places require public assistance to be financially feasible.

Twenty-six Gateway Cities have been identified across the Commonwealth. Each community was once a lynchpin of industry and a center for employment. Over time, as macroeconomic factors, including the rise of overseas manufacturing, came into play, these jobs were lost, and the cities found themselves struggling to adapt to the new economic paradigm. With significant investment from the private and public sectors, we can restore these cities to glory, albeit in new and different forms.

Developing housing in major cities like Boston comes with certain challenges, including identifying space and often enduring a lengthy approval process. While the end result does increase the housing stock, it is also housing that many residents simply cannot afford. We need to look to the Gateway Cities as a way forward to provide much needed housing that is much more in sync with the lives and livelihoods of the residents of Central and Eastern Massachusetts.

Why does development in Gateway Cities require special public support and attention? Simply put, while construction and operating costs are relatively similar between Boston and a Gateway City (within 10-20 percent of each other), Gateway Cities do not command anywhere near the rents that Boston does. Indeed, Gateway City rents are often times as little as half the rent levels seen in the state’s capital city. Even with modest land expenses, this mismatch between construction costs and rent levels makes it exceptionally challenging to finance projects exclusively through the private sector.

The need is there, with hundreds and thousands of tenants and retailers wishing to call Gateway Cities their home. But such need itself is often not enough to make new construction economics work. Evidence of this economic reality is clear in the vacant or deteriorating structures in core downtown locations in Gateway Cities. Meanwhile, such vacant structures are eyesores whose continued deterioration does the community further damage by diminishing interest in investment.

Winn has been involved in numerous redevelopment projects in Gateway Cities and other secondary markets. Once a structure is successfully redeveloped, the privately-owned buildings around it can be seen to improve almost immediately, creating safer and more attractive neighborhoods and generating higher rent levels, which lead to an increased tax base and reduced need for public subsidies in the future. This virtuous cycle is true even for affordable and mixed-income housing developments, which, when well-constructed and managed, are far and away better neighbors than vacant or neglected market-oriented properties.

The need for public assistance in market rate apartment creation can diminish over time as areas benefit from the great work of the development community. However, without the kick-start of public funding, buildings will remain vacant, neighborhood growth will stagnate, and quality of life will suffer.

Gateway Cities are home to more than 25 percent of the state’s population, and are crucial to the diversification and well-being of the Massachusetts economy. Significant investment in these cities can help to alleviate the Bay State’s housing crunch. On the commercial side, the lower asking rents, coupled with existing infrastructure in these areas, including transportation, regional access, hospitals, higher education institutions and night life, make these Gateway Cities especially competitive with Boston and New York.

The newly enacted state assistance laid out in the recent legislation is not a complete solution, but it is a meaningful acknowledgement of the unique needs of Gateway Cities. These state dollars for Gateway Cities leverage far-reaching revitalization, quality housing, new jobs, and increased tax revenue. We look forward to the continued expansion of such funding so that substantial economic progress can be claimed.

Gilbert Winn is managing principal and Michael O’Brien is executive vice president of WinnCompanies.