In 2020, Boston's multifamily market took a major hit. The metro, one of the most expensive in the nation in terms of rents and other costs of living, suddenly faced an exodus: The Boston Globe reported more people left the capital of Massachusetts than arrived in 2020, with population surges instead happening in smaller metros elsewhere in the state or further away in the region.

Data presented by RealPage Analytics highlight some of the impacts this has had on Boston's multifamily rents in particular, with the Intown Boston submarket reporting rents plummeting by as much as 21.3% between 2020 and 2021, and Cambridge/Somerville by a rapid 14.8%.

Recovery Well Underway

Despite these intense headwinds, Boston's multifamily sector has come back to life surprisingly fast. Investment transactions exceeded $3.2 billion in 2021, the highest ever reported, Yardi Matrix's February report on the metro concluded, with stunted development activity compressing vacancy rates in most of the city.

Rents have bounced back, too. A report from brokerage firm Colliers notes that last year's asking rent increase of 11% marks the highest rate of growth in two decades. And while many of the Bostonians who left the city during the pandemic may never return, multifamily demand appears strong enough to absorb new deliveries with few problems.

Some Signs of Stress

That's not to say Boston is completely out of the woods. The metro still faces an acute affordability crisis, and escalating rents amid an insufficient amount of multifamily development will only compound this problem. The City of Boston has acknowledged that more than half of renters in the city spend more than 30% of their income on housing, and rapidly rising home prices continue to push homeownership further out of the reaches of many.

In March, Boston Mayor Michelle Wu established a task force to identify possible policy solutions to the city's affordability concerns. These policies could include rent control or stabilization initiatives, though what form these recommendations will take may not be known until the start of the next legislative session in January next year.