Apartment vacancy rates are rising in the Boston Metro, according to recent articles in Boston Bisnow and the Boston Herald. On a year-over-year basis, apartment inventory is up by an average of 58%. Available units in the South End and Beacon Hill have more than doubled in number, and vacancies in the Back Bay have tripled.
It is speculated that the COVID-19 lockdown period, which included the closing of area universities and colleges, led to an unusually high number of broken leases. Available apartment listings in the Boston Metro increased 31% between April and May. Much of the tenant loss is attributed to departing college students who broke existing leases and chose not to renew leases for the fall semester.
As more apartment units became available, other tenants displayed a greater propensity to move and take advantage of widening choice. The migration of tenants from one development to another, and from one neighborhood to another, caused vacancies across the multi-family sector.
To retain current tenants, a number of Boston Metro landlords and property managers are offering incentives. Some incentives include rent discounts for early lease renewal, or the promise of no rent increases in return for signing a lease extension.
Some analysts expect the softening in multi-family rents to be temporary. Still, Boston Metro landlords who rely on student populations may need to attract a wider range of tenants in the weeks ahead, or consider offering month-to-month tenancy for students in uncertain times.
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