The Boston region is on pace to add 5,336 apartments in 2019, 24 percent fewer than in 2018, according to an analysis from real estate research and listings site RENTCafe. There’s a big caveat to the report: It tracked only developments with at least 50 units.
Still, the marked year-over-year decline even among the number of new apartments via these larger projects underscores a main reason why rents are so relatively high in the Boston area: a lack of supply amid perennially high demand.
That demand has come from a generally robust economy—in particular strong biotechnology and technology presences, which add residents affluent enough to rent all of those $2,400 studios and $6,000 three-bedrooms—and from steady population growth in general. The region is careening toward 5 million residents as you read this.
Other metro regions are in the same boat as Boston, according to the RENTCafe report. The New York area, Houston, greater L.A., the Washington area, and Dallas-Ft. Worth—these and others have posted sizable construction totals, but those totals are still way off from 2018.
“High construction costs and a narrow pool of skilled labor are just a few of the factors hindering the development of new apartment units,” according to the report.
High construction and land costs are indeed part of the challenge of building new apartments in the Boston area, especially on a larger scale. Then there are all sorts of other challenges, not least zoning regs that change from town to town and city to city and the simple lack of developable parcels in many areas.
But there are plenty of regions around the U.S. where the pace of apartment construction in 2019 is well ahead of 2018’s, whatever the challenges, the report found. These include Austin, Seattle, San Jose, and Phoenix.