Fenway Rental Market Forecast 2023
The Fenway rental market is showing no signs of slowing down so far in 2023. With RTVR and RTAR both well below historical levels, it’s hard to see a way out from rising rents even in a slow and mismanaged economy. Fenway will always be a neighborhood where rental demand is high due to its close proximity to local universities and medical facilities.
Fenway is in desperate need of additional housing units to meet this growing demand, but it lacks the availability of developable land to do so. The city will have to figure out a way to make it easier for landlords to add additional bedrooms and units to their existing properties in Fenway to make the most out of the current housing stock that is there. The city needs to provide incentives to property owners to develop more market rate housing so that they quickly start building which could help alleviate the short supply. Many of the current apartment developments are not moving forward because the deals will not pencil due to the huge amount of affordable housing requirements. Right now we are in a tough situation due to our incredibly high construction, energy and material costs. Builders are disproportionally hurt when energy prices are high as well as runaway inflation. This raises the cost of the finished product so by asking for more affordable units out of a developer causes the deal not to make financial sense so we end up with less housing.
Without focusing on delivering a massive amount of new supply without onerous restrictions, it will be difficult for Fenway to curb rising rent prices. Rent prices could turn downwards in Fenway if we see a wave of corporate layoffs like we did in the last recession. For now, Boston’s unemployment rate remains low despite the sluggish national economy, indicating that rent prices are unlikely to come down anytime soon. We will continue to track these market trends as they develop.