Berkshire Group has selected Furnished Quarters to provide short-term corporate apartments in iwts 832-unit Benjamin and Via towers in Boston’s Seaport District, joining more than 90 other rental buildings in the city.
Building more multifamily housing in Boston is the cornerstone of Mayor Marty Walsh’s strategy to bring apartment rents and condominium prices under control, and developers have been doing their part with more than 13,000 units completed since 2014.
But in a high-profile segment of the market – luxury rentals – short-term corporate housing providers are snapping up many of the residences. Nearly 100 apartment buildings in Boston are advertising short-term rentals, according to research by the Fenway Community Development Corporation. An industry group survey counted more than 1,000 corporate apartments being rented in Greater Boston last year.
A $3.2 billion industry nationwide in 2016, its local expansion is generating pushback from affordable housing advocates and elected officials who say corporate housing inflates rents in one of the nation’s priciest housing markets. Developers should be required to disclose plans for corporate housing during the Boston Planning and Development Agency’s review of their projects, City Councilor Josh Zakim said.
“One aspect that needs to be discussed – just like height and parking requirements and unit mix – is plans for these apartments to be master-leased for short-stay rentals,” Zakim said. “That may make sense in some projects, but what doesn’t make sense and is unfair to neighbors is for that not to be part of the discussion.”
A council hearing on Zakim’s resolution to discuss local regulations is expected to be held within a month.
New York-based corporate housing provider Furnished Quarters now lists availabilities in 14 luxury buildings in Boston. The latest is Berkshire Group’s 832-unit Benjamin and Via towers in the Seaport District, which selected Furnished Quarters to market an undisclosed number of luxury apartments steps away from the offices of global corporations like PwC and General Electric.
Corporate housing industry representatives say their product fills a needed niche: while typically offering lower rates than nearby hotels, they offer larger and professionally-managed lodgings and perform criminal background checks on clients.
Demand for short-term rentals in Greater Boston has rebounded in tandem with the economic recovery, expanding from 795 units in 2010 to 1,212 units in 2015 before declining to 1,063 units in 2016, according to data compiled by the Indianapolis-based Corporate Housing Providers Association.
The average daily rate in 2016 was $195, the highest since the survey period began in 2007, and the average length of stay was 74 days. Properties in the city of Boston accounted for 731 units, with an average occupancy rate of 86 percent.
Making Inroads In Gentrifying Neighborhoods
Longwood Group, developer of the 195-unit Serenity apartments in Jamaica Plain, announced in June it leased 24 apartments to Churchill Corporate Housing bringing the occupancy rate up to 38.5 percent.
At the Benjamin and Via, Berkshire Group recently announced it has reserved “dozens” of apartments for listing through Furnished Quarters. Furnished Quarters declined to provide more specific numbers, and Berkshire Group executives were not available for comment.
“The Boston-area market for furnished apartments continues to thrive due to the very diversified business needs here in the area that span from corporations to education, hospitals, pharma, finance, tech, insurance, entertainment and more,” Furnished Quarters Executive Vice President Annette Clement said via email.
An influx of 50,000 high-wage earning Amazon employees would boost Boston-area rents by another 0.5 to 0.8 percent per year, according to a recent study by Apartment List.
Fenway CDC recently compiled a database of more than 95 apartment buildings in Boston which have advertised corporate rentals online through companies including Northeast Suites, Churchill Corporate Housing and Oakwood Worldwide.
“At every (BPDA) hearing I’ve been at, no developer has ever said they’re in the plans,” said Rich Giordano, policy and community planning director at the Fenway CDC. “At the end of the day: boom, there they are. Right now, it’s the Wild West.”
Along with high-cost areas such as Back Bay, corporate rentals are popping up in gentrifying neighborhoods such as Mission Hill, where residents called for action at a community meeting last week, Zakim said.
“It’s concern about affordability, but it’s also civic life,” he said. “If you’re trying to build a community, having people here for a (short-term) lease is different. It’s not to say it’s unacceptable, but when we’re planning and people are not staying there long term, the impacts are different.”
Local regulations could be dependent upon the passage of legislation by Rep. Aaron Michlewitz, D-Boston, establishing a statewide framework for communities to regulate both corporate housing and the Airbnb industry. The bill would require providers to register with the Department of Revenue, divide properties into three categories based upon length of stay and number of units, add a hotel-like tax paid by occupants, and earmark a portion of tax revenues to support affordable housing.
