Off-campus renters, including international students, are a key demand driver for Boston apartment properties, and the market in some student housing hotspots are feeling disruption from Trump administration policies. iStock photo
As the widespread Sept. 1 apartment lease rollover date approaches in Boston, a red flag has emerged in leasing downturns tied to the Trump administration’s restrictions on international students.
Off-campus renters are a key demand driver for Boston apartment properties, representing approximately 38,000 tenants citywide. The effects of student renters on the Boston apartment market were laid bare in 2020 when campuses suspended in-person learning during the initial COVID outbreak, and Boston apartment rents tumbled at the third-fastest rate of any U.S. metro.
A similar pattern is emerging in some student housing hotspots as the international student influx feels disruption from Trump administration policies.
In Mission Hill, current availabilities are approaching 4.9 percent, up from 2.9 percent 12 months ago, according to data by online rental platform BostonPads. The listings comprise data from more than 19,000 small landlords in Greater Boston.
“The international students may still be showing up at the last minute, but this is as last-minute as it gets,” BostonPads CEO Demetrios Salpoglou said.
By contrast, South Boston apartment availabilities are under 1 percent, less than half the level from August 2024, according to BostonPads.
International Students Look Elsewhere
The Trump administration’s policies have disrupted the presence of foreign students in the region’s higher education ecosystem.
In March, Immigrations and Customs Enforcement (ICE) agents arrested a Tufts University doctoral student after she penned a student newspaper commentary on the Israel-Hamas war in Gaza. In May, the U.S. State Department temporarily suspended scheduling of new student visa appointments overseas, and the administration is battling Harvard University in federal court over a proposed ban on enrollment of thousands of foreign students.
Large institutional apartment landlords are wary of a potential chilling effect on rental patterns in Boston.
“It does appear that the student inbound activity through July is a little bit below normal, so a little bit below where we were in July 2024. And inside that, we do see a little bit of softening in the foreign inbound migration as well,” Equity Residential Chief Operating Officer Michael Manelis told analysts in an Aug. 5 earnings call, noting that students represent about 3 percent of the company’s tenants. “These are very small quantities, though, so I don’t know if I would read too much into it yet.”
Existing and potential further cuts to federal research funding also appear to be creating “pressure and uncertainty” in Boston’s rental market, Manelis added.
Nearly two-thirds of the student renter population lives in four neighborhoods, according to Boston Mayor’s Office of Housing research: Allston, Brighton, Fenway and Mission Hill.
Rent Increases Continue Across Region
Across the broader metro region, declining new supply is propping up rents in one of the nation’s priciest markets.
Approximately 10,800 new units are under construction, representing 4.2 percent of the total inventory representing the lowest figure since 2012, commercial brokerage Colliers reported.
According to data compiled for Colliers by researchers at CoStar, asking rents increased 2.2 percent on a year-over-year basis. Vacancy rates at stabilized properties are 6.3 percent, after a quarter in which more than 3,000 new units were completed. Average asking rents set another record at $3.28 per square foot, up from $3.23 in the previous quarter.
“We need to see more MBTA Communities projects get going,” said Jeffrey Myers, Boston research director at Colliers. “We need to see more downtown office conversions get going if you’re going to get out of the housing crunch. Most of those things are just in the early pipeline right now.”
Weakness in the local job market, driven by cuts to education and research sectors, could moderate demand and future rent growth, Myers added.
Apartments.com data indicates rent for the average Boston listing – a 693 square-foot apartment – increased 1.9 percent in the past year to $3,513 per month in August.
The online rental listing service’s Boston region encompasses listings in Boston, Cambridge, Chelsea, Everett, Medford, Revere and Somerville.
Apartments.com reported this month that Greater Boston apartment vacancies are currently 6.4 percent, up from 4.1 percent in early 2022. By contrast, the national average is 7.8 percent.
Publicly traded apartment REIT’s report continuing rent increases in their Greater Boston portfolios.
Highlands Ranch, Colorad-based UDR reported revenues per occupied unit rose 3.9 percent on a year-over-year basis to $3,321 in its Greater Boston portfolio, which totals 4,667 apartments, during the second quarter.
Boston ranks second after New York City among U.S. metros in Equity Residential’s average rents at $3,659, according to its second quarter earnings statement. Average rents rose 1.6 percent in the Chicago-based REIT’s Boston portfolio, which totals 7,237 units and a 96.7 percent occupancy rate.
Major Projects Appear on Horizon
The Healey administration estimates that Massachusetts needs to generate 222,000 new housing units by 2035 to keep pace with demand.
Two state-led initiatives designed to encourage multifamily development are starting to bear fruit. But ribbon-cuttings for most of the new apartment complexes that could be built are still years away, leaving market power in the hands of existing landlords for the time being.
Steve Adams
Developers are starting to submit large-scale proposals for housing developments catalyzed by the MBTA Communities law, which required 177 communities to rezone districts for multifamily housing by-right near transit stops. In an Aug. 6 news release, Healey’s office claimed there were roughly 5,200 homes “completed, permitted, awarded funds or in [the] development pipeline” thanks to the law.
In recent weeks, national developers have begun permitting for several major projects in MBTA Communities districts.
Trammell Crow Residential is seeking approval for 752 apartments at 10 Plain St. in Braintree, a largely vacant industrial parcel located a mile from the town’s Red Line station.
Greystar is seeking to redevelop a former factory-turned-office site with 189 apartments at 110 West St., next to the MBTA commuter rail’s Needham Heights station.
And Boston-based Transom Real Estate is proposing to redevelop commercial properties at Medford’s Wellington Circle as a 248-unit apartment complex in the city’s MBTA Communities district.
State real estate officials simultaneously are starting a rapid rollout of surplus property sales to housing developers.
Healey’s “State Land for Homes” program is offering underutilized parcels including former group homes, state hospital properties and parcels on state college campuses through a mixture of absolute auctions and requests for proposals.
A statewide inventory completed this spring identified 450 acres of properties that can be redeveloped as up to 3,500 new homes, the administration estimates.
