The Boston region has some of the highest rents of any major metro area in America. There are multiple reasons for this.
High barriers to entry in the sales market. The region’s sales market is also one of the most expensive in the nation. The median asking prices for houses and condos in downtown Boston, for instance, run to well over $1,000 a square foot each. In surrounding communities such as Brookline, Cambridge, and Somerville, it’s not all that much cheaper. So a lot of people who might buy in the Boston area rent instead.
Plenty of tenants with money to spend. The region has a sizable share of rent-burdened households, wherein tenants pay at least 30 percent of their income in rent. But the area also boasts a sizable proportion of residents for whom $2,500 a month for a one-bedroom is not a big deal. Sometimes being one of the nation’s economic drivers has its drawbacks.
Tight inventory. While Boston-area apartment construction has boomed in recent years, it’s still not enough to satisfy demand. We should note, too, that inventory is tight in the sales market, making it that much more difficult for prospective buyers—often current tenants—to jump in.
Perennially high demand. Boston proper’s population has been trending upward for nearly a decade. It’s still a ways from a peak of around 800,000 in the early 1950s, but it’s more than enough to fill the new apartments coming online. Regionally, too, the population has been trending upward, and is expected to hit 5 million, give or take, any day now.
Horrible commutes. Commutes in and out of—and around—Boston have worsened over the years. The share of Boston-area commuters who travel more than 90 minutes to and from work increased 50.1 percent from 2005 to 2016, for instance. Living that much closer to the workplace to offset some of this time-sucking awfulness has helped drive the demand for housing in Boston proper that much higher.
Not enough new construction. Blame whatever you want for this one—NIMBYism, construction costs, land prices, byzantine zoning—but a historically sluggish construction pace has exacerbated the tight inventory and perennially high demand in the region.
Not enough of the most needed new construction. It’s not just that construction hasn’t kept pace with demand in Greater Boston, it’s that the sorts of larger-scale multifamily buildings really necessary to boosting inventory have been hard to come by. Officials and residents have prioritized luxury developments or single- to three-family homes at different times. Again, blame whatever you want—a lot of people blame the region’s patchwork of zoning regs—but the area hasn’t facilitated the construction of enough apartments to keep pace with population and job growth.
Speaking of job growth and housing. Officials in the Boston area permitted an average of 2.3 new housing units per 1,000 residents from 2008 to 2018. At the same time, though, the region slapped on 5.8 jobs per 1,000 residents, meaning that 2.5 jobs were added for every new housing unit in the Boston region. Again, being one of the nation’s economic drivers has its drawbacks.
Tenants staying put. Who can blame them? With options scarce and rents high, many tenants simply cling to what they have rather than say downsize or strike out on their own sans roommates. For instance, a February 2020 report concluded that a sizable share of larger homes—those with at least three bedrooms—are occupied by older households of only one or two people or by groups of unrelated roommates. That leaves families with kids in particular struggling that much more to land the very apartments they need.
College Town U.S.A. The Boston area is home to dozens of universities, colleges, and community colleges, including more than 30 in Boston proper that enroll more than 150,000 students. Not all such students live on campus, meaning they drive demand for apartments in the area that much higher. Plus, attempts at more novel ways to get students out of the general market—including via privately developed dorms unaffiliated with a school—have either failed or been few and far between.
Lack of long-term planning. See much of the above.