Boston’s Shadow Inventory: A Pipeline Problem

According to data from the Boston Planning Department, a significant gap exists between the potential and realized housing supply in the city. Since 2020, 83 Letters of Intent (LOIs) for large-scale development projects have been filed, representing a potential of 15,290 units and over 23 million square feet of residential space. While 54% of these projects (45 total) have secured approval, only five have broken ground to date (1,008 units). This leaves a substantial backlog of 40 approved projects totaling 8,205 multifamily units of much needed “shadow inventory.”

The Greater Boston region faces a critical housing shortage, requiring the construction of approximately 200,000 new units by 2030 to stabilize the market. With Boston as a primary driver of regional housing development, the current pace of construction is alarmingly slow causing an increase in rental rates when other regions with more liberal development standards are seeing declining rates.

Several factors contribute to this challenge. Economic headwinds, including high interest rates and construction costs, coupled with political uncertainty, have hindered development progress. Additionally, NIMBYism and bureaucratic hurdles at the local level have created significant barriers.

While recent state legislation allocating $5.1 billion to mostly affordable housing is a step in the right direction, its impact will be gradual. To address the immediate crisis, bold and decisive actions are necessary. This may include accelerated zoning processes, targeted tax incentives, or other innovative strategies to unlock the shadow inventory and stimulate new construction.

Ultimately, the region requires a substantial increase in multifamily housing production at varying levels of affordability to alleviate the affordability crisis. Without significant changes to current policies and practices, achieving this goal remains a formidable challenge.

Those who aim at great deeds must also suffer greatly. - Plutarch

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