Boston is the third most expensive city globally for renting a home, according to a new report from listings platform PropertyClub. Only New York and San Francisco are pricier.
The report’s conclusion underscores a major challenge for tenants—and a seemingly depthless goldmine for landlords—heading into 2020. That is, despite a historic building spree, residential supply remains woefully low in terms of demand in Boston; and therefore rents remain high compared with much of the rest of the nation, if not the world now.
The PropertyClub report compared Boston’s market with the other cities in management consultancy A.T. Kearney’s ranking of the 50 top global cities. (Boston ranks 21st in that index, which seeks to compare things such as corporate investment, public policy, and “human capital” city to city.) The conclusions were based on average one-bedroom rents in 2019, using what the analysis called a standard apartment of 600 square feet, or 56 square meters. It then crunched the rent per square foot per city.
Boston’s rental market averaged $4.25 per square foot, behind San Francisco’s $5.75 average and New York’s $5.20. Washington, D.C., was a distant fourth at $3.88; and Hong Kong was the first foreign city to register, with an average rent of $3.75 a square foot.
As if this per-foot cost was not bracing enough for tenants, PropertyClub also calculated how big an apartment renting for $1,500 a month would be in each global city. In Boston, $1,500 would command 353 square feet—which is 113 square feet fewer than in 2014, and quite a bit less than the vast, vast majority of the other 49 cities analyzed.
Only in San Francisco and New York does $1,500 command less space—261 and 289 square feet, respectively. The PropertyClub chart at the bottom runs down the vitals for many of the cities as they appear on the A.T. Kearney global index.
There are myriad reasons for why Boston rents are so comparatively high. That low supply relative to demand is probably the most significant one (and there are a few reasons for that). Zoning regs in the city and its neighbors is another. The proportion of people in the city who can afford such rents is a reason too.
What’s more, it seems unlikely any of these dynamics will change in the new year. What’d you think?