By: Susan Gittelman, Executive Director of B’nai B’rith Housing, Boston
This article originally appeared in Banker & Tradesman Weekly, and can be read in its entirety with the link below.
It is true that Boston is building apartments like crazy and faster than ever. More than 8,900 new rental apartments will be completed and delivered by the end of 2017, compared to only 3,600 units opened during the last three year cycle in all of Eastern Massachusetts, out as far as Worcester.
With cranes gracing the skies, steel frames rising and banners heralding “luxury living,” it might appear that supply and demand will soon be out of whack.
Some say that we are headed for a housing glut, with lots of empty units and soaring vacancy rates or, alternatively, precipitous drops in rent. I don’t buy it.
As of 2012, Eastern Massachusetts (from Worcester to Boston Harbor) had about 717,000 rental units in multi-unit buildings. In the current boom, developers are scheduled to deliver 4,000 new units each year for the next four years. That sounds like a lot, but it’s only half a percent per year of what currently exists.
And the need will be great. Household formation traditionally has grown here at half a percent a year during the decade ending in 2012. Now, for multiple reasons, that has more than doubled, and will result in about 7,200 households being former annually for the next four years.
Compared to most urban areas in the country, the Boston area has traditionally been “under-apartmented.” Now we’re building.
“We’re in one of the strongest markets ever, and the trends are in the right direction,” said Travis D’Amato, who is senior vice president of capital markets at the real estate firm Jones Lang LaSalle. And he’s bullish on apartments in and around Boston.
(Read full article here)
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