The Inner Suburbs – The Next Big Thing?
by Aaron Jodka
The inner suburbs surrounding Boston and Cambridge are rapidly changing and the real estate community should pay attention. Their proximity to the job centers of those two cities, thanks to mass transit and highway access, has been a long-time boon. Millennials have turned their attention to these historically working-class cities. Lower costs of land and construction allow developers to bring new apartment rentals on line at a lower rate — at or below $3/SF in many instances — than in either Cambridge or Boston. Far more renters can afford to live in these areas, and in fact, the cities of Chelsea (12%) and Everett (10.5%) have had population growth far in excess of the statewide average (3.8%) or in that of the city of Boston (8%), since the 2010 Census (see chart below).
These areas are primed to benefit from major public transportation investment from the Green Line extension and the Silver Line Gateway projects, creating new areas of growth. The Wynn Casino will put Everett on the map of the region's hotel, gaming, entertainment, and nightlife scene. And Assembly Row in Somerville has proven to be a successful redevelopment of a long-vacant former assembly plant. The takeaway: the inner suburbs are generating new growth with their own economic drivers.
Transit-oriented development has proven to be a successful city planning tool as well as a viable real estate investment. Vacancies near transit tend to be lower, while rents are higher. Improved access to job centers fuels population and income growth, and in turn, supports additional housing and broader economic growth. The population base of the inner suburbs area is already growing quickly; add better transportation access on top of its new economic drivers, and the inner suburbs look primed to continue their torrid growth. Urbanization, redevelopment, mixed-use projects, and transit accessibility are all hot topics in the real estate market today, as well as across Boston. The inner suburbs are set to benefit from all of them.