Multi Housing News July 2012 : Page 29
Liu goes on to explain why such a pronounced shift has taken place, placing an emphasis on prudence and a realistic acknowledgement of the limits of certain investments. “Part of it is that there has been such an escalation in amenity, and there comes a point where there’s diminishing returns,” says Liu. “You can’t ratchet the bar much higher and maintain any kind of control over construction costs.” The road ahead Going forward, the positive trends in the New England region are ex-pected to continue, as is the consolidation of Bostonites to the city’s core. As the cost of commuting to downtown from outlying suburbs—which reach as far as New Hampshire—hits unprecedented heights, urban mul-tifamily is expected to see a profound resurgence. “You only need gasoline prices to go up $1 or $1.50 per gallon before they cannot live where they were living before, and that is going to drive a consolidation of population around where they work,” says Liu. “That, in combination with the insecurity of job situations in the new order, is going to favor rentals over homeownership except at the highest in-come levels.” David Cary says he’s observed a gradual evolution of his city into a denser and more cosmopolitan metropolis, with more growth in the forecast that will solidify its standing as a prime hub of the East Coast. “Boston continues to evolve into a little bit more of a 24/7 type city, and you’ve got more people wanting to live in the city,” says Cary. “There’s a tremendous number of units expected to come online in the next two to three years.” Also, Cary notes that the city’s chief assets, as compared to other key metros, will make it a major job center as the economy continues to recover and expand. “Boston benefi ts from the mix that it’s got,” says Cary. “The higher education—you’ve got Harvard, MIT, BCB—you’ve got a tremendous number of colleges and universities, which provide new start-up com-panies. And as they start to grow and the economy improves, I think that’s what will continue to drive the multifamily market.” Liu states that while the overall picture for Boston looks good, there are still numerous areas for improvement in terms of amenities and pub-lic transportation—which can have a tremendous impact on the apart-ment industry. “We have lost a lot of that infrastructure,” says Liu. “It’s fi ne to say that you’ve got 150 or 350 units on top of some station, but if that sta-tion does not take someone to within walking distance, or to a bus that will take them within walking distance of where they’ve got to go, there’s still that.” However, this is not to say that Boston is behind other major metros in terms of public transit. As Liu states, “there are plenty of cities across the country that have virtually no public transportation—no rail or light-rail system.” The city of Boston has had an extensive subway system in operation since 1964. Todd Tremblay at Marcus & Millichap iterates that the region’s eco-nomic situation continues to look up as the key factor of job growth shows no sign of waning, no doubt bolstering the multifamily sector for some time to come. “Employment remains strong in Massachusetts relative to the rest of the country,” says Tremblay. “Massachusetts employment features diversifi cation across many sectors. Job growth will contribute to the increasing demand for residential units.” MHN To comment on this story, e-mail Philip Shea at pshea@multi-housingnews.com More images can be found on Pinterest Waltham Place Apartments (top left) will be a four-story, 155-unit community adjacent to Walker Pond in Watertown, Mass. Bourne Mill Apartments (top right) is a LEED Silver-certifi ed, 165-unit property located in Tiverton, R.I. that is an adaptive re-use of eight former mill buildings ( Photo: Andy Ryan ). Both properties were designed by The Architectural Team. www.multi-housingnews.com | July 2012 29
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