The Boston Metro Area Needs 66,109 New Apartments to Keep Up with Local Demand by 2030: According to a new report from Hoyt Advisory Services, commissioned by the National Multifamily Housing Council (NMHC) and the National Apartment Association (NAA), as a result of international immigration, an aging population, and fewer home purchases, 4.6 million new apartments are needed nationwide by the year 2030.
The Boston metro area alone is expected to need 66,109 new apartments by 2030 in order to keep up with local demand. This growth would increase economic activity in Boston and across the U.S.
According to data from Axiometrics, an average of 3,359 investment-grade units were built annually between 2011 and 2016. The Boston metro area will need to average 4,722 units (5+) per year in the coming years to meet the expected demand. The city is ranked #19 out of 50 metro areas for projected apartment demand by 2030 and will need all types of apartments and at all price points.
Boston apartment developers, owners and managers, and residents contributed $17.7 billion to the local economy annually, and currently, there are an estimated 401,516 apartments in the Boston area with residents that span the age and income spectrum.
Nationally and here in Boston, we’re experiencing fundamental shifts in our housing dynamics, as more people are moving away from buying houses and choosing apartments instead. Boston has strong future economic growth prospects, and the expected increase in apartment rentals will continue to make an important contribution to the metro economy. Supply restrictions are led by land use regulations that rank Boston near the bottom in terms of supply opportunities. A sizeable share of Boston area apartments are categorized as affordable, but are older, reinforcing the need for new apartments affordable to a variety of incomes,” said Mark R. Epker, 2017 President, the Rental Housing Association of the Greater Boston Real Estate Board
People 65 and older will account for a large portion of population growth moving forward across the U.S. and older renters are helping to drive future apartment demand. International immigration is assumed to account for about half of all new population growth in the U.S., which will contribute to the rising demand for apartments. Research has shown that immigrants are more likely to rent and will typically rent for longer periods of time.
Life events such as marriage and children are the main drivers of home ownership. In 1960, 44% of all households in the U.S. were married couples with children, and today, it’s less 19% – a trend that’s expected to continue.
Apartment rentals are on the rise, and this trend is expected to continue at least through 2030, which means we’ll need millions of new apartments in the U.S. to meet the increased demand. The western U.S., as well as states such as Texas, Florida and North Carolina, are expected to have the greatest need for new apartment housing through 2030, although all states will need more apartment housing moving forward,” said NAA Chair Cindy Clare, CPM.
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