The COVID-19 pandemic has fueled changes in trends in the multifamily market across Greater Boston. Developers have had to quickly adapt to social distancing orders, abrupt changes in commuting patterns, and the mass introduction of working from home as part of new developments. Stay-at-home orders and travel restrictions also caused a major disruption in leasing, with the focus shifting to virtual tours and other alternative ways of leasing and advertising available units. At ULI Boston/New England’s digital panel discussion “Trends in Multifamily Development”, panelists discussed the most pressing changes facing the industry. Andy Montelli, Founder of Post Road Residential stated “when things got tough in the spring, it was impossible for customers to come into the office to see amenities, and the technology started to develop where people were able to tour a unit without leaving their home. Quite a large percentage of leasing activity now is being done by people who are renting without stepping foot in the building, until they arrive with their suitcases.”

As developers meet the demand for new buildings, the layouts of multifamily buildings are changing. Pre-pandemic development focused heavily on lively common areas featuring integrated public amenities, shared spaces, and reduced emphasis on individual unit features. Developers have now shifted attention to the location of tenant amenities, building access, and increased space inside units that integrate WFH areas. In addition, the pandemic has created a demand for larger units, reversing the trend of smaller, more compact spaces once seen in Greater Boston.

“We’re really trying to find ways to make units and common areas more supportive of residents' physical and mental health, and designing spaces for improved air and light finding connections to nature,” said Lauren Jezienicki, Founder of One Circle Company at the ULI Boston/New England discussion. “We’re making amenities more flexible with movable furniture and sliding partitions, more glass for residents to feel connected but still private and separate. We designed these robust amenity spaces and a lot of that was put on hold, no one could use them. We’re slowly starting to use them again and eventually they’ll go back into full use but in the meantime, we’re trying to figure out how to make these spaces as flexible as possible and we’re finding creative ways to do that.”

“We’re looking at 10% bigger units maximum, but you don’t necessarily need to make the units physically bigger. We work the floorplans so that they feel bigger than the typical one- to two-bedroom layout, carving a nook for a space for a desk since every unit really needs to have a desk now” said Jezienicki. “Dens and guest rooms were popular pre-pandemic, but now they’re more popular and in-demand than ever.”

The onset of the global pandemic has also shifted investment focal points away from urban centers as investors and residents seek spacier suburban locations and amenities. Sandi Silk, Senior VP of Development at Jefferson Apartment Group, along with another panelist pointed out the value of parking for private vehicles versus access to public transit. “One of the bigger changes is the focus on looking at more suburban locations. Pre pandemic it had been all about the city and walkability, and while walkability is important, there’s been a shift in focal point where a lot of investors are now seeking suburban locations with enough parking. There was a property in the Longwood Medical Area that is now giving away parking. As far as concessions go, this was a notable example of trying to bring in people who no longer feel comfortable on a train.”

Michael Boujoulian, Managing Director of Alliance Residential has also seen a shift toward the suburbs, “we’ve seen demand for urban supply slow from a delivery standpoint and suburban demand maintain pace, and particularly with tools driving development like 40b - which enables local Zoning Boards to approve affordable housing developments under flexible rules - units have been getting bigger. 3-bedrooms are a relatively new entrant into our market.” “As 40b changed their rules and regulations, 3-bedroom units became a requirement at 10% of unit mix. The pent-up demand from barriers for 3-bedroom units has justified the creation of larger units.”

A larger national trend brought on by the pandemic has been the outward migration of people from large urban centers to nearby smaller satellite cities. According to the MHP Center for Housing Data, vacancy rates in Greater Boston spiked to 7.2% in 2020 while vacancies dropped in nearby Worcester from 3.25% in 2019 to 3.05% in 2020. In Providence, RI, rents for a one-bedroom apartment jumped by 14.5% and a two-bedroom increased by 17.5% in 2020, according to the Zumper National Rent Report.

“Boston is seeing a reduction in rents due largely to a decrease in demand for housing from the student population,” said Tom Hopper from the MHP Center for Housing Data. “Data shows that the drop in rent is most acute in relatively more expensive inner core neighborhoods such as the Seaport, Alewife in Cambridge and Downtown Boston, as well as areas with high student populations, such as Harvard/MIT and Somerville.”

Rents in these core communities saw the most significant market reductions. Alewife in Cambridge saw rent reductions peak at 9.4% and Downtown Boston saw a year-over-year drop of 6.3%, with Back Bay asking rents contracting 6.5% and South Boston rents dropping 5%. Conversely, asking rents in Boston’s satellite “gateway cities” rose during the pandemic. Rents in Fall River rose 9% year-over-year, and Lawrence and Haverhill saw rents increase 3%. The far-flung Fitchburg/Leominster area, located more than 50 miles from Boston, saw rents jump 9%.

As vaccinations from Johnson & Johnson and Pfizer become more readily available, municipalities and developers are planning ahead to what the world will look like post-pandemic. “I think that customers really like the idea of working from home, at least part of the time. The average commute in Boston is 46 minutes each way, and in the average week, you save an hour and a half by working from home” said Montelli.  “The adoption of working from home is real and I think it's here to stay.”

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