Boston apartments to be built in the thousands
Feb 2011 26

As the economy shifted, it became harder and harder for developers to get financing for new condominium projects. No one wanted to risk their money on new condo developments if they couldn’t guarantee buyers were going to be there. Lenders had clamped down hard on home-buyers, with tightened credit requirements making it difficult for anyone to qualify for a home loan mortgage.

The developers still have land to build on and still have bills to pay, so they’re turning now to building apartment complexes. The financing is easier to get, since banks realize that people have to live somewhere, and if not in condos then in apartments.

Here in Boston, we’re seeing several large, high-profile apartment projects being proposed and about to break ground. Some of these are already approved projects that are modifying their plans, taking out condos and putting in rental apartments. Others are brand new proposals. Driving the new construction is the relatively-easy financing as well as a simple lack of supply – the vacancy rate in Boston is expected to drop to 4.5 percent.

From the New York Times:

In the last several weeks, [Boston] officials have allowed developers of three buildings with nearly 1,000 units to decrease or eliminate condominiums in favor of additional rentals. Over all, the Boston Redevelopment Authority expects construction to start this year on 21 buildings with a total of 1,855 apartments, nearly all rentals, compared with just 600 starts last year. Of those units 830 were once planned as condominiums, said the authority’s director, John Palmieri.

Some of the projects on-tap for downtown Boston include:

Hayward Place – Downtown Crossing across from the Paramount Theater, 265 units (mostly apartments)
(Parcel 24) – Chinatown on Hudson Street, in the shadow of a Rte-93 on-ramp, 345 units (mostly apartments)
Kensington Place – Chinatown on Washington Street (previously the site of the Gaiety Theater), 381 units
Garden Garage Towers – near Boston Garden, part of the Charles River Park complex, 500 units
AvalonBay – on Exeter Street, on the Prudential Center Plaza, another apartment tower, 188 units

This is all good news; increased supply means more options for renters of any age: college graduates, young professionals, empty-nesters.

Whether or not the supply will bring down notoriously-high rents is another question. There seems to be an insatiable demand for apartments, right now. The developer of Hayward Place “said he could build high-quality apartments that would rent for about $5,000 a month.”

How many people are in the position to pay that? Hopefully, it will bring down prices overall, or maybe just keep them from going up?

More: As Boston’s Economy Grows, Demand for Rental Units Outpaces Condo Market, The New York Times

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