Watertown embraces new housing law that Milton rejects | Say hello to even higher prices and rents as new housing construction collapses in Boston | Wu back with another push to hike taxes on struggling office buildings, businesses | Soda tax could be on tap as Boston pol eyes proposal to target sugary drinks |
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Dead in the water: Construction of new apartments, condos and homes in the Hub all but ground to a halt during the final four months of 2024
The housing crisis in Boston appears to have gone from bad, to worse, to simply catastrophic.
Construction of new housing in Boston fell off a cliff in 2024 amid an ongoing shortage of units of all types that has helped drive prices and rents to record levels, new data indicates.
Last year, city officials issued building permits for just a little over 1,700 units, the lowest overall total since at least 2018, city records show.
That’s less than half the 3,837 new apartments, homes and condos builders broke ground on in 2022.
It’s a big drop-off as well from an arguably anemic 2023, which saw City Hall issue building permits for just 2,083 new units, according to those city records, first obtained by The Boston Guardian.
Meanwhile, in another worrying trend, the amount of residential construction declined precipitously toward the end of 2024.
Building permits for just 177 new units of housing have been issued since the start of September, making it one of the worst four-month stretches in the past six years, city records show.
City officials doled out building permits for just 35 new units in November and another 60 in December.
By contrast, in November 2019, developers began work on 505 new homes, apartments and condos, and another 451 that December.
The declining numbers come against the backdrop of the Federal Reserve’s move to cut interest rates, which some observers had hoped would boost financing for new residential projects.
But housing developers in Boston as well as in neighboring Somerville and Cambridge face more challenges than just stubbornly high interest rates and borrowing costs, one major local builder noted.
Boston and its neighbors have adopted a number of regulatory requirements that make it much more difficult to build in an already challenging financing market, noted Jay Doherty, chief executive of Cabot, Cabot & Forbes.
In particular, the requirement that developers sell or rent 20 percent of all units in a new project at below-market rates has made it hard, if not impossible, to nail down financing and move forward.
Tough new energy efficiency regs have also piled on new costs to apartment and condo projects struggling to move forward, he said.
“As long as the 20 percent is in place, I don’t think anybody starts a project or gets funding to start a project,” Doherty said.
Soda showdown: Boston pol floats a proposal to slap a tax on sugary drinks
Ready or not, the soda wars are coming to the Hub.
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