Wednesday, October 12, 2005

Boston Rental Market.

How much does it cost to rent an apartment in Boston?

The other day I rented a two bedroom apartment on Columbus Avenue in the South End section of Boston, for two young professionals . Upon reviewing their rental application, I realized it would cost them 65% of their take-home pay to afford this apartment (not including cable, electric etc...) As you can imagine, I was reluctant at first to rent the apartment to them but, due to their excellent references I proceeded anyway. But it got me to thinking, how much does the average person need to earn to live in Boston, and how much of their take home pay is applied to rent. My findings were shocking.

According to the Greater Boston Housing Report Card published by the Boston Foundation, a family of four needs to make at least $65,000.00 to make ends meet. This exceeds New York City by $6,000.00 and San Francisco by $7,000.00

I then found out from the same report that the average renter in the Boston South End spends 80% of their take home pay on housing. What is also a suprise, is even though they are spending 80% of their income on rent you would think that they were just starting out in the workforce and therefore were young. However, the South End has the lowest population of 18-24 year olds in the city. Most South Enders are of the age of 25-64 professionals in thier prime earning years and yet, they are still struggling to make ends meet.

Other facts from this study:

Neighborhood-------------- Average Rent---- -- % Income Needed To Pay Rent

Allston/Brighton -------------- $1,300.00--------------------- 42%
Back Bay/Beacon Hill ---------- $2,250.00 -------------------- 45%
Boston Midtown--------------- $2,200.00 ---------------------50%
Roxbury----------------------- $1,250.00----------------------62%
Fenway/Kenmore ------------- $1,498.00 --------------------- 74%
South End --------------------- $1,950.00--------------------- 80%

I feel that this is the root cause of the pending slowdown in the Boston housing market. Basically, how does a young couple save for a downpayment on a home when they are spending so much of their income on rent.

According to our last census, New England and in particular Boston, lost 20% of it's 20-34 year olds, which is twice the US average. Our young professionals are creating a brain drain in the area as they begin to migrate to the southeast and midwest where the cost of living is cheaper. This I believe is a very troubling demographics for the future of the Boston housing market. Presently, the Boston population growth is anemic. The only New England region gaining in population is New Hamphsire and that is a result of the migration of our young profesionals from the state of Massachusetts.

These are the views of the writer not that of the Ford Realty staff.
To view property for sale in Boston or Brookline visit our web site at www.fordrealty.net

9 Comments:

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As a non-spammer, I was impressed by the research to find out what people will pay for housing! My thoughts of living in Boston quickly went out the door when I saw those numbers! Will stick it out here in Arlington TX I suppose.

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