The spring real estate market is under way, and the cost of rent in Boston is on the rise again in one of the country’s most expensive markets, raising the question of how people making average or below average incomes will continue to live in the city.
According to Brielle Browne, Massachusetts and Connecticut realtor with Coldwell Banker, the price fluctuation will most likely be temporary.
“Ninety percent of homes that are owned in Boston are investment properties,” she said. “Rent will probably go down and investors will start selling. Currently there is an abundance of inventory and the rental market has been much slower…. Banks are finally lending and people can afford to buy versus rent. Roughly 90 percent of the homes in Boston Proper at one point were considered ‘investment properties’. Of those, roughly 70 percent are rented out through the college life cycle.”
According to the 2017 Greater Boston Housing Report Card, in fiscal year 2018, the Commonwealth will spend a total of $432 million on multiple housing programs plus initiatives aimed at combating homelessness. Of the total, $183 million goes to the housing programs with the larger share while $249 million goes to homeless programs. This amount represents the second annual funding cut in a row, reducing the state budget for housing related spending 14 percent from the previous fiscal year.
With more construction coming on line, the rental vacancy rate has increased for the past three years, reaching 4.7 percent in 2017, a rate surpassed only once since 2011.
Short term rentals are another factor affecting rental prices, especially in the Fenway and Chinatown areas. A study entitled “The Sharing Economy and Housing Affordability: Evidence from Airbnb,” shows that the increase in Airbnb listings leads to a slight increase in rent.
“[Boston] has been one of the heaviest builders in the country since 2009,” said Mark Hickey, an economist at CoStar regarding the opening of future apartment buildings.
Many of these properties, however are luxury locations and are not typically affordable with the average income of about $82,000.
The Massachusetts Rental Voucher Program provides rental assistance to people with disabilities under the age of 60, who either live in, or are eligible to live in, elderly or disabled state assisted public housing. Recipients of the voucher pay 25 percent of their income for rent with some utilities or 30 percent if all utilities are included in the rent, subject to limitations.
The Boston Tenant Coalition advocates for homeless people and affordable housing while campaigning for tenants’ rights and affordable housing.
“Rents are really high and are unaffordable with what the incomes are,” said Kathy Brown, coordinator at Boston Tenant Coalition. “Thousands of people are on the waiting list for affordable housing. It’s been a problem with people getting priced out of Boston neighborhoods.”
Kelly Turley, Associate Director of the Massachusetts Homeless Coalition, believes that the rise in rent will affect homelessness. She also notes that higher rents have a greater impact on people of color and women.
“Ever increasing rents in Massachusetts have greatly contributed to the Commonwealth’s homelessness crisis, with fewer and fewer tenant households able to afford their rents,” Turley said. “We will continue to see rates of homelessness rise unless and until the state and communities invest in upstream homelessness prevention resources, long term affordable housing subsidies, and the development of new housing opportunities below the current market rates.”