Boston's building spree rivals '80s boom

(Correction: Because of a graphic artist's error, a map with a story about Boston's building spree in Friday's Business section incorrectly located West Roxbury. It is in the southwest section of Boston.)

Nearly 14,000 residential units, primarily condominiums, are currently in the construction pipeline in Boston, the city's planning agency said yesterday. Though exact comparisons don't exist, officials believe the number of units under development equals or exceeds the building spree of the 1980s.

The value of these developments totals $5.5 billion to $6 billion, according to Jay Russo, deputy director for development review for the Boston Redevelopment Authority, which released the figures yesterday. South Boston is the neighborhood with the largest number of residential units slated for development -- 2,607 -- followed by East Boston, the South End, and the Fenway-Kenmore Square area.

''The city is changing," Russo said, citing the Rose Kennedy Greenway over the Interstate 93 tunnel and other downtown initiatives. ''People want to live in the city's downtown," he said.

Projects in the pipeline include those that have been approved by the BRA, have obtained city permits, or are under construction. Total residential units include rental apartments and condos, though the vast majority is condos.

With so much development in the works, an obvious question on the minds of realtors, bankers, and developers is whether Boston is repeating the 1980s housing boom and bust, when prices soared and then plunged after investors pulled out of the market. The BRA could not provide data on how many units were built during the late-1980s boom, though spokeswoman Meredith Baumann said longtime officials believe today's development exceeds the prior boom.

Kevin Ahearn, president of the Boston brokerage firm Otis & Ahearn, agreed. Based on BRA data, he estimated 4,930 condos are currently in the pipeline downtown, including the Back Bay and South End, and are slated for completion over five to eight years. That compared with about 3,300 condos in the pipeline in 1988 and 1989, he said, with a shorter construction timeline of up to five years, he said.

''There's more building in the pipeline now than in the '80s, but the demand is three times what it was in the '80s," Ahearn said. ''We need all of the inventory we can get. That's one of the reasons prices have had an upward spiral, because there hasn't been enough inventory."

But Karl Case, a Wellesley economics professor, said the volume of monthly building permits issued statewide, which had a recent peak of 2,471 in March 2005, is ''not even close" to the peak monthly permits in 1985 of 4,183. ''The economy really collapsed in 1989 and 1990," he said. ''Now it's growing, albeit slowly."

The BRA's Russo said an emphasis on residential construction in Boston is in line with Mayor Thomas M. Menino's ''Leading the Way" initiative to bring people downtown to live. Boston's population had some growth during the 1990s, but it slipped slightly after 2000 as the city's economic base of financial-services and high-technology industries shrank.

There is strong demand for housing in the city from people ages 20 to 34, who make up one-third of the city's population, Russo said. Developers and real estate specialists said that baby boomers are also moving into the city, and new studies show that highly educated immigrants working in the city's knowledge industries are driving housing demand.

Areas prime for development include South Boston's waterfront, ''one of the biggest undeveloped swaths of land on the East Coast," Russo said. He also pointed to building in East Boston, long an enclave for low-wage immigrants coming into the city. East Boston, he said, is a ''gem" that is ''turning around."

The current building boom is ''different than the '80s," said Debra Taylor Blair, president of Listing Information Network, which hosted a talk for real estate agents downtown in which the BRA data were released. Twenty years ago, most of the new construction was concentrated in East Cambridge and Back Bay, she said. Today, it is ''spread out over the city."

In the 1980s, she said, ''it was an investor-driven market, and this is definitely a buyer-driven market."

Kimberly Blanton can be reached at blanton@globe.com.