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There’s no relief in sight for Boston renters

Rent growth accelerated this year. Next year won’t be much different.

Challenges of renting in Boston
Globe housing reporter Andrew Brinker explains the impact of vacant apartment scarcity to renters across the city.

This was the year the apartment rent fever was supposed to break.

And break it did, with monthly lease rates falling in most of the biggest cities across the country, according to estimates from Apartment List, an online rental marketplace.

Boston has been a notable exception. Not only have local rents climbed this year, the gains accelerated from 2022.

Next year probably won’t be much different.

The news: The median rent in the Boston metropolitan area was $1,958 in November, an increase of 2.9 percent from a year earlier, Apartment List data show. (The median is the price at which half of all apartments are more expensive and half cost less.)

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In Boston proper, the median rent was $2,095, also up 2.9 percent, ranking us the 15th most expensive US city (fourth if you exclude California municipalities).

Nationally, the median rent fell 1.1 percent over the past year to $1,340, according to Apartment List. The steepest declines among the largest metros: Austin, Texas (6 percent), Portland, Ore. (5 percent), and San Francisco (4 percent).

Why it matters: Housing costs eat up a significant chunk of the typical household budget. While rents are easing in other big cities, Boston has gotten no relief.

It’s always been expensive to live in Eastern Massachusetts, but home sales have dried up amid a sharp rise in mortgage rates, pushing up home prices. That’s made it harder for renters to become homeowners and kept apartment vacancy rates low and rents high.

“It’s a really tough market,” said Chris Salviati, senior housing economist at Apartment List.

Supply constraints: Construction of multifamily units is near a record high, and that new supply has helped push down rents in 68 of the 100 largest cities, Salviati said.

Again, Boston is an exception.

In the Austin area, 9.6 multifamily building permits were issued per 1,000 residents last year, the highest rate in the country. In Greater Boston, the rate was just 2.2 permits, putting the region in the middle of the pack.

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Chronic underbuilding has created a painful shortage of apartments in Boston, said Demetrios Salpoglou, chief executive of Boston Pads, a real estate information and tech company. And as colleges boost dorm costs each year, local landlords are able to increase rents and still offer a cheaper alternative to on-campus housing.

“If universities keep raising their room and board, it creates an automatic uplift in all the surrounding neighborhoods,” Salpoglou said.

Salpoglou’s data show that just 1.5 percent of apartments in the city will become available to rent through next September. The vacancy rate today is a meager 0.6 percent.

Looking ahead: Eleven months into the year, Boston rents have increased 5.4 percent, compared with a 4.6 percent gain during the same period last year, according to Apartment List.

Economist Salviati doesn’t have a formal estimate for 2024, but he wouldn’t be surprised if city rents rose by 5 percent or 6 percent.

Final thought: Boston’s sky-high rents are the byproduct of a number of successes and some key failures.

On the plus side: “A really strong local economy. Some of the best universities in the nation. A place where people want to live,” Salviati said.

The negatives: High construction costs and exclusionary zoning regulations, which have limited apartment supply.

The result is a brutal rental market that won’t be getting better any time soon.

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Larry Edelman can be reached at larry.edelman@globe.com. Follow him @GlobeNewsEd.