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Apartments stay afloat in sinking economy

By Peter Reuell/Daily News staff

The MetroWest Daily News

Posted Sep 07, 2008 @ 11:30 PM

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For the most part, economic news these days isn't good.
Analysts are predicting the national economy will sputter through the rest of the year with only limited growth, while the housing market struggles to recover from the fallout of the sub-prime mortgage crisis.

Where things are going well, however, is in the apartment market.

With projects either proposed or under construction in Ashland, Marlborough, Northborough and Sudbury, the market for apartments in MetroWest appears to be booming.

"Things are not robust, but they're nowhere near as bad as what has occurred in the single-family arena," said William McLaughlin, the senior vice president for development for the northeast for Avalon Communities, Inc. "(This region) was terribly under-supplied in rental housing for decades. We're still sort of catching up, so to speak."

One reason for the continued popularity of apartments boils down to simple affordability.

Despite housing prices that continue to tumble, renting is still cheaper for many than buying a single-family home or condominium, said Greater Boston Real Estate Board CEO Gregory Vasil.

"It's a choice with consumers whether to buy or to rent, and affordability is greater on the rental side," he said. "More people can afford to rent."

Perhaps more importantly, Vasil said, the apparent boom in apartment construction means towns will be able to offer residents a greater variety of housing options - a critical factor in maintaining the region's economic health.

"I think what they're trying to do is attract...people who are working, people who have good jobs," said Susanne Morreale-Leeber, president and CEO of the Marlborough Regional Chamber of Commerce.

With technology companies like Raytheon, Intel, Genzyme and Evergreen Solar in the region, the demand for trained, skilled workers is high, "and there's got to be housing for them," she said.

As baby boom generation workers retire, younger workers are taking their place in the work force, but few workers in their 20s are in a position to buy a single-family home or condo, Leeber said.

In order to keep those workers in the region, apartments are needed.

"This is the generation we want," Leeber said. "We're looking for our future. That's why (apartments) are doing so well. They're a real popular place to start before you buy a home."

"Everything is cyclical," added Ted Welte, president of the MetroWest Chamber of Commerce. "The economy will bounce back, we just don't know when.

"We're seeing planned job growth in Framingham and Natick and some other surrounding towns. Those workers are not necessarily going to be in a position to buy a house right away."

Studies already show Massachusetts is losing younger workers, Welte said, and housing costs are often cited by those who leave the state.

"If we could provide the less expensive alternative of renting for a few years, maybe those young people will stay here and be workers we really need to keep those companies here," he said.

In the coming years, Welte said, the Chamber hopes to develop the region's cultural offerings as a way to attract more young workers.

"Assuming there's something to do for them here, similar to what's happening in Cambridge and Boston, maybe they would say, 'OK, I'm going to make the move,"' he said. "We're not quite there yet, but by the time a lot of these units come on-line, the economy will be better and some of the quality of life issues will be filled in. Hopefully, the combination of things that will keep this area growing in the right ways will come together."

 

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