The number of new housing permits that municipalities in eastern Massachusetts, including Boston, will issue in 2016 will be down 18 percent from 2015, according to a new study from the Boston Foundation.
The decline will be the first since the region’s construction boom commenced in 2011.
Why the decline? It appears “the region has run out of customers willing to shell out huge sums in monthly rents,” according to the Globe’s Tim Logan, who has the news of the foundation’s report.
The vast majority of these housing permits, in Boston proper and surrounding communities, are, indeed, for apartments. And many of those apartments are famously pricey, particularly in downtown areas such as the South End and the West End.
Yet, while on the surface it looks like a slowdown in the construction of such pricey apartments is a good thing for tenants and prospective tenants, it’s not. That is because our perennially popular region really, really needs the inventory.
As long as demand for decent housing far outpaces supply, prices and rents will remain significantly higher than in much of the rest of the country.
Estimates vary, but those who follow these things say the Boston area needs many thousands of units annually just to keep up with population growth—and it’s not getting those thousands of units, even with the recent construction boom.
For instance, Boston proper has approved just under 2,700 housing permits this year. Meanwhile, the city’s population is expected to grow from about 645,000 right now to nearly 800,000 in just the next few years.
At least Boston is among the handful of eastern Massachusetts municipalities building apartments and condos (i.e. multifamily housing). Many cities and towns are barely building any—for them, it’s single-family homes or nothing.
This approach further exacerbates the challenge of bringing down prices as everyone crowds into the areas where the new housing is going up. Or will have gone up now, as the case may be.
- Boston’s luxury housing boom slows down [Globe]
- Boston's South End: the 12 Projects Changing It Forever [Curbed Boston]
- The 5 Boston neighborhoods everyone should be watching [Curbed Boston]