If you look at the prices that they set for the apartments, they basically just set them at the upper fed limits.
Those are pretty steep rents for a town like this. Sheesh, I pay $600 for my mortgage (incl taxes) on my 2200sq/ft, 4bdr home. yet the feds say that $614 only can get you a studio apartment. Which, at this point is correct, because every landlord is simply going to follow their guidelines to get as much as they can.
I agree with your point about the artificially inflated rents, but North Adams has no shortage of low income housing. Building more, regardless of initial quality, will only lower demand for borderline properties and send them deeper into disrepair.
That is one of the main reason I want the city to actively incentivize owner occupied housing. There is nothing that stabilizes a block like a handful of homeowners who give a damn about their property values, the safety of their families and the simple aesthetics of their neighborhood.