Boston’s newly passed city ordinance, which prohibits property owners from hosting short-term rentals in homes they don’t live in and aims to make data on short-term rental properties more widely accessible, is one of many efforts across the northeast to regulate the short-term rental industry. As the short-term rental industry has grown – Airbnb alone now boasts more than 5 million listings – the number of affordable multifamily housing units available has dwindled. Consequently, as supply has diminished, the ability to secure units in already competitive metro markets has become increasingly difficult.
Gentrification is breathing new life into neighborhoods across Greater Boston. A recent report by Governing Magazine shows that since 2000, more than 20 percent of the Census tracts in Boston that were eligible for gentrification have done so, resulting in a 50 percent increase in home prices in some neighborhoods. Most recently, East Boston, South Boston and Dorchester have begun to reap the benefits of gentrification, spawning new development which is, in turn, driving up asking rents. As these neighborhoods come into their own, offering improved access to transportation and jobs, investors can benefit from buying undervalued Class-B and Class-C assets and making capital improvements that will lay the foundation for increased occupancy, sustained rent growth and higher returns.