Many benefits of densifying urban centres are intuitive: better connectivity for workers, access to local amenities, more people using sustainable public transport. The list goes on. New evidence from Cambridge, Massachusetts shows that prioritising urban areas for new homes also slows down rent increases.
In the same year that Cambridge’s Democrat-led local leadership allowed for more urban densification, rents rose by just 1.7%. This is a huge turnaround from the two years prior when rents had risen by 16%. The case of Cambridge highlights the clear affordability benefits of focusing new housing on urban centres.
Densification is bringing down rents
Cambridge, MA is a hugely important area of Greater Boston’s economy, and indeed America’s. The town is home to MIT and Harvard, as well as countless innovative businesses that have sprung up around these world-class universities. This means that it is also in high demand from highly skilled workers that move there to work on some of the world’s biggest problems. It is also home to the many working-class people who make Cambridge function. Despite this huge demand, up until February 2025, the neighbourhoods of Cambridge, Massachusetts added very few new homes. This placed the town under immense stress. An average 1 bed apartment cost well over $3,000 per month, way out of reach of a teacher working in the local schools.
Under huge political and economic pressure, in February 2025, the city council changed planning rules to allow new homes at greater density on the same existing plots of land. Unlike developer focused housing reforms, this bottom-up, small-scale densification reform echoes the style of Labour-led Haringey’s successful upward extensions policy, which has seen almost 60% of all eligible homes choosing to add additional bedrooms.
Massachusetts is taking forward the lessons of the UK’s community-led reform: allowing local people to densify could see nearly 5,000 new homes over the next 15 years in Cambridge’surban areas.
Prioritising urban areas in this way means the same area will now get the new homes it needs, all while sidestepping adversarial debates around building on green sites – as seen in Haringey. Encouragingly, new evidence now shows that just one year into Massachusetts’ densification reforms, affordability is already improving.
As supply improved in a highly constrained market, rent growth stayed low, while incomes pulled ahead. In 2025 Cambridge’s median household income rose by around3.4%, comfortably outpacing the 1.7% rise in rents. This means households get to keep more of each pay rise.
One could imagine homeowners opposing housing reforms that reduce rents but Cambridge demonstrates how reforms can be win-win. Even as rent growth slows for Cambridge’s tenants, its densification reforms are lifting land values for homeowners. A two-home plot in Cambridge Highlands, which had previously sold for $1.5 million, was sold again just 6 months later for $3 million as a plot for building nine homes. Upzoning can increase land values at the same time as reducing rents, alleviating homeowner concerns about property values, while improving affordability for renters too.
Cambridge’s affordability gains are not an outlier
The connection between building more homes and improving affordability goes beyond this case study alone. There is a growing wealth of evidence highlighting the relationship between new homes in high-demand cities and rising affordability, as seen in the tables below by Jay Parsons.
Rents are falling in the American cities that build new homes
| Rank | City | Change in rent for lower-cost market homes | Supply above U.S. average? |
| 1 | Denver, CO | -13.9% | YES |
| 2 | Naples, FL | -13.5% | YES |
| 3 | Austin, TX | -13.3% | YES |
| 4 | Fort Myers, FL | -11.8% | YES |
| 5 | Myrtle Beach, SC | -11.0% | YES |
| 6 | Phoenix, AZ | -10.5% | YES |
| 7 | Boulder, CO | -10.4% | YES |
| 8 | Asheville, NC | -10.3% | YES |
| 9 | Sarasota, FL | -10.0% | YES |
| 10 | Fort Walton Beach, FL | -9.9% | YES |
| 11 | Colorado Springs, CO | -9.0% | YES |
| 12 | Pensacola, FL | -7.3% | YES |
| 13 | San Antonio, TX | -7.2% | YES |
| 14 | Macon, GA | -6.6% | NO |
| 15 | Dallas, TX | -6.5% | YES |
| 16 | Salt Lake City, UT | -6.3% | YES |
| 17 | Huntsville, AL | -6.3% | YES |
Source: JPI research, RealPage Market Analytics. U.S. average supply = 2.5% expansion rate. Markets marked “yes” expanding their apartment stock >2.5% & Jay Parsons
… as rents continue to rise in cities that aren’t building many new homes
| Rank | City | Change in rent for lower-cost market homes | Supply above U.S. average? |
| 1 | Springfield, MA | 10.1% | NO |
| 2 | Champaign-Urbana, IL | 7.9% | NO |
| 3 | Worcester, MA | 6.8% | NO |
| 4 | Eugene, OR | 6.3% | NO |
| 5 | Allentown, PA | 5.5% | NO |
| 6 | Youngstown, OH | 5.4% | NO |
| 7 | Akron, OH | 5.0% | NO |
| 8 | Providence, RI | 4.9% | NO |
| 9 | Albany, NY | 4.8% | NO |
| 10 | Shreveport, LA | 4.2% | NO |
| 11 | Jackson, MS | 4.0% | NO |
| 12 | Trenton, NJ | 3.9% | YES |
| 13 | Salinas, CA | 3.8% | NO |
| 14 | College Station, TX | 3.8% | NO |
| 15 | Springfield, MO | 3.7% | NO |
| 16 | Rochester, NY | 3.6% | NO |
| 17 | Cincinnati, OH | 3.6% | NO |
| 18 | New York, NY | 3.5% | NO |
| 19 | Hartford, CT | 3.5% | NO |
| 20 | Stockton, CA | 3.1% | NO |
Source: JPI research, RealPage Market Analytics. U.S. average supply = 2.5% expansion rate. Markets marked “yes” expanding their apartment stock >2.5% & Jay Parsons
Cambridge also offers a warning that well-intended conditions often produce the opposite of what they intended. The city has two rules meant to enable affordable housing. The first requires any scheme of ten homes or more to make a fifth of them affordable, but in practice, developers build only nine homes to avoid the rule. The city also offers a reward: commit to 20% affordable, and you can build six storeys instead of four. But unfortunately, the city has not seen many of these six storey buildings. Developers are instead choosing to build smaller developments of up to four storey rather than triggering affordable housing requirements. This means that fewer homes overall are delivered.
Conclusion
Overall, the success of densification of urban areas in Massachusetts points to a helpful lesson for the UK. By pursuing bottom-up, place-first reforms, we can improve affordability with the support of local communities.
To find out more about community-led reforms, visit our webpage.
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