The Boston area is one of only five metros that accounted for more than 90 percent of job growth in the nation’s innovation sector from 2005 to 2017, according to a new report from the Brookings Institution, a D.C.-based think tank.
By 2017, then, the five metros—which also included San Francisco, San Jose (Silicon Valley), Seattle, and San Diego—accounted for nearly 23 percent of the jobs in the innovation sector, which Brookings defined as industries with an especially intensive emphasis on research and development and a significant need for science, technology, math, and engineering talent (think tech and biotech).
“As a result, fully one-third of the nation’s innovation jobs now reside in just 16 counties,” a summary of the report said, “and more than half are concentrated in 41 counties.”
While the analysis dealt mostly with the effects of this concentration—especially just how far behind these five metros are leaving the rest of the country in terms of tech-y employment—it also highlights a salient feature of the Boston-area housing market.
Namely, one of the reasons that prices and rents are so high here is that the area includes so many residents in relatively high-paying jobs in the innovation sector (the Brookings report summary notes that the sector has “generated significant ... wealth” for its members). These residents can afford $3,000 studio rentals and $700,000 one-bedrooms.
In fact, a study earlier this year from real estate research and listings site RENTCafe found that the number of renter households in Boston proper pulling in at least $150,000 a year had jumped 182 percent from 2007 to 2017, to the point where especially affluent tenants occupied more than 1 in 10 renter households.
Part of the reason for that, of course, is that there is such a demand from people who can afford it in a market that runs perennially short on supply. What’s more, it doesn’t seem like much is going to break the cycle of relatively low supply and high demand, including from affluent renters and buyers, any time soon. Yes, the Boston area is in the midst of a historic construction boom, but it’s still not enough.
And the Brookings analysis makes clear that Boston and those handful of other metros will likely keep slapping on the higher-paying innovation jobs versus the rest of the country unless the federal government steps in with investments and incentives. Stay tuned.