If so, what does it mean for the hub’s ever present housing crisis?
Every year on Sept 1, the streets of Allston flood with trucks for the annual move-in apocalypse known as Allston Christmas.
It is the day when students, who make up a significant portion of Boston’s population, move into new apartments in time for the start of the school year. This cycle is particularly evident in student-heavy neighborhoods like Allston-Brighton and Mission Hill.
But what happens when it still is not clear how many students will actually return? To what extent did quarantine hinder apartment hunting, which typically starts as early as February? What impact will the potentially pending flood of evictions have after the end of the state’s October 17 moratorium? And, ultimately, how will this all impact housing availability and affordability?
“I’ve been looking at housing for 35-40 years,” said Barry Bluestone, founding dean of Northeastern’s School of Public Policy and Urban Affairs. “This is the first time I have felt uneasy about making any projections or forecasts.”
Harvard University announced that it would conduct all classes online in the fall. Other major Boston area schools are still conducting in-person classes at this point, but are expecting many students to opt for online classes.
Fewer students competing for housing could mean that landlords have to lower rents in order to remain competitive. But that might only be a temporary effect if students return in 2021. In the longer term, the impacts of COVID-19 could mean less housing and higher rents due to demand.
“I think the short run story is that rents will soften in Somerville, Cambridge, and Boston. This is mainly because young people who may have come here as graduate students or older undergrads may not be coming,” Bluestone said. “In the longer term, what this may mean is many developers who had plans to develop new residences might think twice about going ahead with their plans. We may have another supply shock.”
The expiration of leases following Sept 1 could also be the latest in a series of coronavirus-related financial hits for property owners. Tenants are clearing out of larger rental properties, such as those with four or five bedrooms, according to MassLandLords executive director Douglass Quattrochi. Prospective renters are less eager in the age of quarantine to move in with multiple people—particularly if they are not related.
“Those units are emptying out,” Quattrochi said. “All the pressure is on one-bed or studios. I would be surprised if those units declined.”
For tenants who have spent that last few months struggling to make rental payments, a collapse among smaller property owners could mean a transition toward large, corporate, out-of-state ownership.
Quattrochi further speculated that many of the smaller landlords—those with only a few properties at most—will be more likely to sell to larger real estate investment trusts as their tenants struggle to pay rent.
“The big picture is that 5% of our landlords are trying to exit the business. Another 20% don’t know how to pay their bills. They’re going to sell out to condo conversions,” Quattrochi added. “Landlords who have a personal connection with renters are less likely to jack up the rents. Corporate renters don’t know anyone’s name. It’s really a loss if you lose these landlords.”
This shift could be devastating for renters, according to Heather “Homefries” Matthews, spokesperson for City Life/Vida Urbana.
“One thing we’re really concerned about is that the pandemic can really open up a lot of opportunities for corporate owners to scoop up a lot of housing. Often when there is a crisis, corporate consolidation can come out of it,” she said. “Properties that have absentee landlords have a higher likelihood of eviction filing. We really believe that the stability of the renter population goes hand to hand with the stability of small owners.”
Concern about the consolidation of property ownership has been a long-time challenge for City Life/Vida Urbana. With COVID, that threat has grown clearer with September approaching.
“I think it will be different this year because there is so much up in the air with colleges and universities in the area,” Matthews said. “In terms of evictions, anyone who has a lease that runs out, they’re not protected from displacement under the law.”
While it is entirely possible that Allston Christmas is canceled this year for people who need a place to live, Labor Day weekend may still bring on the anticipation of Christmas morning for property profiteers that view homes as financial investments.
“There’s inertia to speculation in this city,” Matthews said. “I think the trend for the past almost decade has been increasing speculation in the housing market. Even in this pandemic, this inertia is not going to grind to a halt. There’s still going to be a lot of landlords seeking the highest price.”