Luxe condos remain top dog amid Boston’s building boom
Housing in Boston is among the highest-priced in the nation and despite cries for more affordable housing, luxury condos reign supreme amid Boston’s building boom as developers confront high land and construction costs.
“Given the high cost of land and construction — costs which are going up and up and up — in order to pay back lenders and have any kind of profit at all, developers need to build to high end,” said Tamara Small, CEO of NAIOP, a commercial real estate development association.
Housing construction costs increased 76 percent in Massachusetts since 2011, according to the Federal Housing Finance Agency, and Small said that’s led to a dearth of affordable housing across the state.
Nearly 25,000 new residences were built or permitted in Boston between 2011 and 2018, but barely 4,700 of those were subsidized units, according to city data.
During that same period, the cost to buy a home in Boston increased 8 percent faster than per capita income, and rent in Suffolk County increased six times as fast as household income, federal data shows. The median home price is now $570,500 in Suffolk County, which requires a household income exceeding $122,000 a year, according to the Department of Labor. Rents now top $3,000 for a one-bedroom in some areas of the city.
Small said Boston has been working to chip away at its housing supply issue, but said most housing coming online is affordable to most residents.