Boston had lowest year-over-year increase in rents since 2014
Mayor Martin J. Walsh today announced that 2019 marked the lowest year-over-year increase in housing rental prices since the City began tracking this data in 2014, building on Boston's comprehensive approach to ensuring housing is equitable and affordable for all residents who live in the City. According to an analysis of Boston rental data from 2018 to 2019, rental prices increased an average of 1.3 percent citywide, indicating that housing prices are stabilizing in neighborhoods across Boston. These numbers can be compared to last year's rent prices from 2017-2018, average rent listings increased by 3.3 percent citywide.
"The stabilization of rents across our neighborhoods demonstrates our housing plan in action," said Mayor Walsh. "We know housing is the cornerstone of creating more opportunities for all, and we will continue our work producing and preserving housing for our residents. While I know we have more work to do to keep pace with the demand for affordable housing, I am encouraged by this milestone, and look forward to keeping up this momentum."
According to the analysis, rents in several neighborhoods, on average, saw no price increase or a reduction in prices across the span of listings, including studios, and one to three bedroom listings, including Back Bay, Beacon Hill, Roslindale and South Boston. Of the City's housing stock, listings for studio rents in Dorchester, East Boston, Charlestown and Jamaica Plain showed a decrease from 2018-2019. One bedroom rents in Back Bay, Beacon Hill, Charlestown and South Boston all saw decreases. Roxbury saw no change in listing rent prices from 2018-2019 for studios, 2, or 3 bedroom units. Mattapan, the Fenway, and South Boston all saw no increases in 2 and 3 bedroom units. Data indicates that housing production is helping those neighborhoods keep up with demand and stabilize prices.
Under the Mayor's housing plan, Boston has permitted over 23,000 new rental units throughout the city, of which 24 percent are income-restricted to low- and middle-income households. In 2019, 77 percent of all new permits were in Boston's neighborhoods outside of the downtown area. Over half of all housing production has been in units with two or more bedrooms.
"Despite slowing demand and the continued strength of new construction, U.S. rental markets remain extremely tight, with rents rising faster than inflation in most markets across the country," said Chris Herbert, Managing Director of the Joint Center for Housing Studies of Harvard University. "But Boston appears to be bucking the national trend with slowing increases in rents that seems clearly linked to the substantial increase in the City's supply of new apartments in recent years."
To address the cost of housing, in the fiscal year 2020, the City spent over $59 million on affordable housing production and preservation, providing more opportunities for residents to obtain housing in Boston. Another $38 million went towards housing homeless individuals and providing supportive housing for our most vulnerable households, and $2.6 million towards housing stability programs serving households in or approaching a housing crisis.
Creating and preserving rental opportunities is one of the goals of Mayor Walsh's comprehensive housing policy for Boston, Housing a Changing City: Boston 2030. In his State of the City speech earlier this year, Mayor Walsh has pledged $500 million over the next five years to create and preserve thousands of rental units across Boston affordable to households with low- and middle-incomes.
Through increases in the City's operating and capital budgets, the $500 million investment announced in the Mayor's State of the City address will double the City's current funding in affordable housing to $100 million. Additional revenue will be generated by selling the Lafayette Garage, as well as working with the Massachusetts Legislature to approve a transfer fee of up to two percent on private real estate sales over $2 million in the City of Boston. These combined investments will increase the available funds for affordable housing to five times current funding levels over the next five years.
Additionally, Mayor Walsh recently awarded $69.2 million in funding for the creation and preservation of 1,097 units of housing, both rental and home ownership, in Brighton, Chinatown, Dorchester, East Boston, Hyde Park, Jamaica Plain, Mattapan, Roslindale, Roxbury and West Roxbury. These funds represent the largest affordable housing funding awards by the City of Boston since the release of Housing a Changing City: Boston 2030. The $69.2 million commitment is over and above the $500 million commitment.
In an effort to remove barriers to housing for residents, Mayor Walsh recently announced that he is launching a working group to study broker fees in Boston to understand how these fees impact renters in the City.
As part of the Administration's commitment to helping renters stay in their homes, Mayor Walsh has filed a legislative package with the State Legislature that includes proposals to protect renters. They include measures that would allow tenants and non-profits the right of first refusal to purchase properties they are living in; the right to legal representation for tenants facing eviction; and additional protections for senior tenants. Mayor Walsh has publicly testified at the State House to support the passage of these proposals.
"This report shows that building more homes helps to stabilize prices, and that's good news," said Marc Draisen, Executive Director of the Metropolitan Area Planning Council (MAPC), the regional planning agency for Greater Boston. "We're on the right path, but we have a long way to go. We need to make sure more communities around the region do their part to provide homes for all the people powering the regional economy, especially lower-income residents and families. Boston can't solve the housing shortage on its own."
Boston is both geographically and economically connected to its surrounding cities and towns. While Boston is permitting housing to keep pace with the Housing Plan's goals, housing production is not keeping pace with demand in the region as a whole. In a coordinated effort to create a regional response to our housing shortage, the Metro Mayors Coalition, led by Mayor Walsh and Somerville Mayor Joseph Curtatone, has set a goal of creating 185,000 new housing units by 2030. This is a good first step to stabilizing our regional housing market and will help to stabilize prices if participating municipalities do their part to meet those production goals.
Since Mayor Walsh took office in 2014, the City of Boston has built more than 65 percent of all new homes in Greater Boston, with 20 percent of them deed-restricted for low- and middle-income households. Boston has surpassed 32,000 units permitted under the administration's housing plan, including more than 6,200 deed-restricted units and 500 units for senior housing. More than 1,000 Boston Housing Authority units have been renovated, and the Department of Neighborhood Development has assisted more than 600 homebuyers in purchasing their homes, and has aided 946 homeowners with mortgage workouts or other assistance in averting foreclosure or stabilizing their housing.