Construction has become a common site in Boston, with more than $7 billion in construction reportedly taking place right now within the city’s core neighborhoods. Yet, even with so many new developments being created in the city, Boston’s residents are faced with rising rent and housing prices, leaving some to worry that the city may be approaching a bubble that could lead to devastating results.
The Shifting Boston Demographic
At its population peak in the 1950s, Boston was home to approximately 801,000 residents. While the current population from 655,000 is far from the peak figures, the city is still home to a large number of residents whose needs have changed from those of the 1950s. Many of the city’s residents are millennials who are using the available housing in a different way than before. The iconic triple deckers found in neighborhoods such as Hyde Park and Back Bay, for example, are no longer used for entire families or as densely packed rooming houses. Rather, they are split by groups of young professionals and students.
Rising Rent in Boston
With young professionals and students sharing the rent, the cost becomes more manageable and prices continue to go up. As a result working-class families with less flexibility are finding themselves unable to pay the rising costs. In fact, according to reports, rent in Boston is rising at a pace that is five times the rate of incomes. Furthermore, the city has the third highest rental costs in the country, behind only San Francisco and New York. As such, households making $80,000 per year can only access the bottom quarter of the housing market. As a result, these residents are shut completely out from finding a place to live within entire neighborhoods in the city and they are being forced to live further and further from those neighborhoods that cater to their needs.
Reaching Out to Citizens
The bottom line is that rising rents and property values has a mixed effect on the city. While high property values and a strong metropolitan economy can help the city grow as it increases revenue, it puts affordable housing out of reach for many of the city’s residents. Even worse, the city is facing a growing homeless problem, with homelessness in Boston increasing 15 percent since 2011.
To help address this problem, the city of Boston is making plans to build 53,000 new units to meet a predicted demand for 44,000 units. Unfortunately, fixing the problem is not an easy fix, as population changes occur over a span of decades while construction of new units takes a great deal of time, money and funding. Furthermore, additional communities are at risk for gentrification with due to planned changes in the area. Union Square, for example, is at threat of rent hikes due to the planned Green Line Extension in the area.
If you are interested in looking at available property in the Boston area, contact our team of professional real estate experts. We will be glad to help you find the home that is right for you.