If you're a renter in Boston, perhaps you've noticed that this year has been just a tad more difficult to find your dream space...or any space for that matter, than times past. I've heard from multiple friends that their landlords are basically forcing them to move out due to the current market. Landlords know that they can find tenants willing to pay asking price, so that's exactly what they are doing. According to market trend spotting brokerage Rental Beast, the average monthly rent jumped more than 7 percent to $1,881 in the past year. In a hot spot like the Back Bay, you should expect the average rent to run you a whopping $2,857 a month; in another trendy spot like Jamaica Plain, a modest $1,536 by comparison.
This rent escalation isn't just happening in Boston though. According to New York data firm Reis Inc., Boston is only the fifth most expensive rental market in the states. We in Boston got beat out by the two other obvious contenders, New York City and San Francisco. To be honest, I'm personally quite content letting them win that race. Landlord's and rental property managers however are enjoying this immensely, because they know that when tenants vacate, it's a golden ticket for them to reap some monetary benefits.
Rental Beast says the vacancy rate, already low last year at 3.8 percent, has dropped to 3.1 percent. In high-end neighborhoods such as the Back Bay and South End, not even 1 percent of apartments are vacant. That's making the apartment search nearly impossible. If you're looking for places with pre-existing roommates, the search becomes even more difficult because this whole process is similar to that of a nerve wracking blind date combined with a job interview. People are now looking for utopian roommate conditions and are willing to expend the extra time and effort to find the perfect candidate as oppose to allowing the first decent visitor to take the vacancy.
Real estate brokers feel that the rental increase is in part due to Boston's successful economy in the ever growing tech and biotech industries. Because more people are now moving to Boston to work in these fields, said industries are expanding to downtown areas. See: Innovation District.
Why else is this rent increase happening in Boston? Well three probably causes. Older couples are choosing to live in the city rather than the suburbs, probably because even they know that the city is clearly where all the action is at.
Young professionals are still choosing to rent vs buy even when rent is obviously a more temporary solution and doesn't give your future housing a whole lot of stability. But really it's not about the rent, but moreso about the freedom from mortgage and being tied down to one location. Boston also has tons of higher education institutions and students don't want to live on campus anymore, sharing their room with some stranger who will most likely sexile them during exam time.
According to an article in Boston.com, Boston officials said they have permitted construction of 3,256 apartments so far this year in central neighborhoods such as the Back Bay, Fenway, and the Seaport District, where rent pressures are at their most extreme, and another 1,077 affordable units citywide for lower-income tenants. The city has numerous other initiatives that encourage developers to build or preserve subsidized housing, especially for populations like the elderly.
But many of the new market-rate units have been high-end apartments in the city’s more expensive neighborhoods — downtown and the waterfront, for example — that end up reinforcing higher rents throughout the market.
What IS available for rent are more upscale luxury-style apartments, which obviously targets only one demographic. A future solution to the overwhelmingly high rental demand is those tiny, micro Manhattan style apartments (see below) that have just enough room for you to sleep. Expected size of these units will be approximately 350 square feet, will be located near the Seaport District and the projected rent will range from $1,200 to $1,600 a month. Gotta love shoebox living.
So let's put this all into perspective, shall we? If you spend 40-50% of your hard earned blood sweat and tears income on your housing, you are looking at more stay-cations, not going out nearly as much, shopping at Good Will and probably forgoing that overpriced gym membership. Awesome. If you look on the bright side however, You will probably be able to fit into your middle school skinny-jeans again, living off that lettuce leaf and unfiltered tap water. It's high time that Boston look into constructing more affordable housing by perhaps eliminating minimum lot sizes and easing restrictions on multi-unit buildings.
Here's what I propose: As rent goes up, your employer should increase your pay (which should be done regularly anyway if you have half a brain and show any promise in your field) the same percentage of expected rental increases so that you can in fact pay this inflation and you won't be homeless. No one wants to have to move back in with their folks against their will (insert noose here). I don't recall that being a part of the American Dream. Granted if you look at the bigger picture, higher rent = higher taxes, which, if used correctly, means better city living conditions overall. So let's try to look at this as a glass half full, mmmmk?