Haven’t had time to review the BPDA’s report on Trends in Article 80 Development? We’ve got you covered and are breaking down the trends on the residential front that are most important for property owners and managers. The report covers development trends dating back to 1996 when Article 80 was first put in place.
Residential projects have made up almost half of article 80 approval (47%) since 1996 with Downtown Boston, the South Boston Waterfront, and Fenway/Back Bay as the busiest neighborhoods. 2016 was the busiest year on record with 100 projects approved. 2017 was also solid with another 74 approvals. With all of these projects in the pipeline, BPDA expects an increase in permitting and construction in the coming years including the transit-oriented development projects The Back Bay South End Gateway & South Station Air Rights.
There are also numerous large projects under construction now expected to be complete in the next few years including the residential portion of The Hub on Causeway with 440 units and Bulfinch Crossing, approved in 2016, under construction now with the first phase, 423 units, becoming available in 2020. Washington Village, approved in 2016, will also finally start moving forward in the coming months with Samuels & Associates joining the project. This development will bring over 650 residential units to the already busy South Boston.
But with Boston’s growing population these new residential units are being absorbed. Since 2000 the Boston population has increased by over 93,000. As we know the Mayor increased the housing goal for Boston 2030 from 53,000 units of housing to 69,000 units to ensure a variety of housing options will be available for this growing population.
Rents are also continuing to grow, from 2006 to 2017 the median rent in Boston increased by 17%. With many of the new projects comprised of luxury rentals or condos, workforce or middle-income housing will continue to be in high demand. However, with construction costs on the rise, it will be a challenge for developers to make the numbers work on these projects.
While BPDA approvals peaked in 2016, the number of residential units in the pipeline is still high. Landlords will need to be conscious of their rents as new product comes to market and buyers will watch pricing as mortgage rates continue to creep up. The report shows overall positive growth for the city and with a large number of approvals yet to permitted we don’t expect the boom to slow down.