The rent prices in Boston are in the top three highest in the country. It’s just after San Francisco and New York City. The average monthly rent in Boston is $3,463 as of January 2020. That is more than twice the national average of $1,463. Keep in mind the rent prices in Boston are on average $500 cheaper than in New York City. Also remember that rent prices has remained steady in Boston over the past few years. During the COVID-19 pandemic, rent dropped considerably throughout the entire city.
The highest rent costs in the city are in South Boston, with surrounding South End, Back Bay and Beacon Hill coming in second, third, and fourth place. If you are looking for more budget-friendly parts of Boston, check out Hyde Park, South Dorchester or Mattapan.
As the data suggests, Boston and the surrounding area is without a doubt one of the most expensive places to live in the country.
But when did Boston become such a cosmopolitan metropolis? Let’s look at some of the factors that have led to the high cost of living in Boston:
Many Residents have Spare Cash to Spend
Though many Bostonians struggle to pay their rent each month, there are plenty of residents who are able to spend thousands of dollars each month on rent. It’s advised that tenants only pay around 30% of their monthly income on rent. With major financial and technical companies located in Boston, there are Bostonians who can easily budget a $2,500 one-bedroom apartment. Those who work in Boston receive compensation for the high cost of living that comes with Boston. With higher paychecks, come higher rent prices, which the average Bostonian cannot even afford.
Entering the Sales Market is Challenging
Renting is usually preferred to buying in Boston. There’s a simple reason for this: Boston has the third highest sales market in the entire United States. In downtown Boston, apartments and condos will cost around $1,000 per square foot. Popular neighborhoods like Somerville, Cambridge, and Brookline are also extremely pricey. Lots of Bostonians cannot afford to purchase their own housing, and instead have to commit to paying high rent prices each month.
High Demands for Housing
In the past ten years, the population of Boston has been steadily rising. This is mainly due to the influx of new residents, moving to the city for school, a job, or to simply explore one of America’s most renowned cities. The population reached a peak in the 1950s, where over 800,000 people called Boston home. Now, the metropolis of Boston has a population around 600,000, with a relatively steady increase. (If these numbers seem low, remember that the Boston metropolitan area has a population of 4.8 million. Only 600,000 people live in neighborhoods that are formally a part of the city.) In the next few years, the population of the greater Boston metro area is predicted to reach 5 million.
Not Enough Rental Properties
While there are a decent number of rental properties on the market in Boston, they have not been enough to fill the demand. New units are always being developed in Boston, but many are expensive and out of the average person’s budget. It’s important to note that this is one trend that has been changed by COVID-19. With residents fleeing the city for less dense areas, there are more units available in Boston now than usual, and for less. If you’re looking to move to Boston, now may be a good time. When enough of the U.S. population is vaccinated and social distancing measures can end, it will be interesting to see how the real estate market changes.
New Construction Can’t Keep Pace with Demand
Even though construction has boomed recently, there is still not enough housing to accommodate the demand. There are a few reasons why construction cannot keep up with so many new residents. Boston’s zoning laws are exceptionally complicated, the price of land is extremely high, and the serious investment of construction is daunting for many.
Sluggish Boston construction has worsened the already dire housing situation in the city. It’s important to note that while there is a lot of active construction in Boston, it’s not the type that will actively solve the housing crisis. Especially in a city like Boston with such a competitive real estate market, investors prefer luxury apartments to housing for the average Bostonian.
The most sought after apartments in Boston have one-bedroom, yet new developments in the city typically have three or more bedrooms. Construction has ignored the real estate demands in the city and continue to develop luxury apartments that are unaffordable for most.
Massive Student Population
Boston is America’s college town, famous for its massive network of elite colleges and universities. There are over thirty schools within the city itself, enrolling more than 150,000 students. There are many of these students live on campus. But many of the larger universities in Boston don’t offer housing for upperclassmen or graduate students. That is why there are still tens of thousands of people each year looking for short-term housing in the city.
Typically, students snag many of the cheaper apartments or units nearby universities, making these some of the most difficult places to find housing in all of Boston. The massive yearly influx of students also increases the overall demand for housing in the city. Boston has attempted to control this student demand by constructing student-specific housing, but the concept didn’t catch on. Instead, students and residents compete for housing in attractive neighborhoods.
Lack of Long-Term Planning
As you’ve probably gathered from this article, Boston has not been planned super well. The city has historically failed to accommodate all those attempting to relocate. City officials for decades have not properly planned for the long-term. Affordable housing has not been constructed while many luxury apartments sit empty downtown because there aren’t enough people to fill them. Hopefully with better leadership, Boston’s housing crisis can be properly addressed with the necessary policy.
Daily Commuters
As people commute further and further to the city each day, traffic worsens in the city. Driving in Boston is notoriously awful. For many, it can take over an hour just to drive the few miles to work each morning. About 50% of those in the Boston metropolitan area dedicate over an hour and a half of their day to commuting. So many attempt to avoid this lifestyle by living within the city and quickly getting to work via public transportation. With such a high demand for inner city housing, it can be tough to find the perfect apartment.
Little Turnover
It’s probably unsurprising that those who find their ideal housing in Boston hold onto it. After reading this article, you’ll probably be nervous about entering the Boston real estate market and are looking forward to being done with the process. Inventory is low and prices are high, so tenants prefer to make do with what they have instead of starting over. According to data from the beginning of 2020, the majority of multi-bedroom apartments are inhabited by people who are not related to each other. This makes finding housing for families in Boston especially hard.
The real estate market is difficult to navigate in Boston. But once you do find housing, you’ll find an incredible quality of life in the city of Boston. It’s absolutely worth it to find your perfect place it the city of your dreams.
