Predictions that multifamily housing construction would taper off in 2015 may have underestimated the ongoing demand for this kind of housing, the vast majority of which is being marketed as rentals.
Seasonally adjusted annualized starts for structures with five or more units rose to 476,000 in June, an 18-year high, according to Commerce Department estimates released a few days ago. That number was 28.6% higher than the annualized multifamily starts rate in May, and 55% higher than the comparable number in June 2014.
Perhaps more significant is the fact that multifamily continues to propel most of the housing sector’s current growth. While annualized single-family starts in June, at 685,000 units, were 14.7% ahead of June 2014, they actually declined by 0.9% compared to May 2015.
“The multifamily gains this month are encouraging and show that the millennial generation continues to be drawn to the rental market,” said Tom Woods, a home builder from Blue Springs, Mo., who is chairman of the National Home Builders Association (NAHB).
All told, the year-over-year annualized rate for all starts was up 26.6% in June to 1,174,000 units.
The NAHB/Wells Fargo Housing Market Index, which tracks Builder Confidence levels, hit 60 in July. The Index also revised its June level to 60. The last time this Index got this high was November 2005.
If permit activity is a gauge of future optimism about demand, builders remain solidly behind multifamily. The annualized rate in June for permits issued for structures five or more units was up 79% to 621,000 units, compared to June 2014. Single-family permits, on the other hand, were up 6% to 687,000, according to Commerce’s estimates. All told, annualized new-home building permits jumped 30% to 1,343,000.
The latest annualized data show that 500,000 structures with five or more units were under construction in June, 20.5% more than in June 2014; and 317,000 units were completed, a 17.9% gain.
David Crowe, NAHB’s chief economist, noted that while the starts and Builder Confidence numbers were positive signs, he cautioned that builders “still face a number of challenges, including shortages of lots and labor.”
Related Stories
| Dec 17, 2010
Vietnam business center will combine office and residential space
The 300,000-sm VietinBank Business Center in Hanoi, Vietnam, designed by Foster + Partners, will have two commercial towers: the first, a 68-story, 362-meter office tower for the international headquarters of VietinBank; the second, a five-star hotel, spa, and serviced apartments. A seven-story podium with conference facilities, retail space, restaurants, and rooftop garden will connect the two towers. Eco-friendly features include using recycled heat from the center’s power plant to provide hot water, and installing water features and plants to improve indoor air quality. Turner Construction Co. is the general contractor.
| Dec 17, 2010
Toronto church converted for condos and shopping
Reserve Properties is transforming a 20th-century church into Bellefair Kew Beach Residences, a residential/retail complex in The Beach neighborhood of Toronto. Local architecture firm RAWdesign adapted the late Gothic-style church into a five-story condominium with 23 one- and two-bedroom units, including two-story penthouse suites. Six three-story townhouses also will be incorporated. The project will afford residents views of nearby Kew Gardens and Lake Ontario. One façade of the church was updated for retail shops.
| Dec 7, 2010
Prospects for multifamily sector improve greatly
The multifamily sector is showing signs of a real recovery, with nearly 22,000 new apartment units delivered to the market. Net absorption in the third quarter surged by 94,000 units, dropping the national vacancy rate from 7.8% to 7.1%, one of the largest quarterly drops on record, and rents increased for the second quarter in a row.
| Nov 3, 2010
Senior housing will be affordable, sustainable
Horizons at Morgan Hill, a 49-unit affordable senior housing community in Morgan Hill, Calif., was designed by KTGY Group and developed by Urban Housing Communities. The $21.2 million, three-story building will offer 36 one-bed/bath units (773 sf) and 13 two-bed/bath units (1,025 sf) on a 2.6-acre site.
| Nov 3, 2010
Rotating atriums give Riyadh’s first Hilton an unusual twist
Goettsch Partners, in collaboration with Omrania & Associates (architect of record) and David Wrenn Interiors (interior designer), is serving as design architect for the five-star, 900-key Hilton Riyadh.
| Nov 1, 2010
Sustainable, mixed-income housing to revitalize community
The $41 million Arlington Grove mixed-use development in St. Louis is viewed as a major step in revitalizing the community. Developed by McCormack Baron Salazar with KAI Design & Build (architect, MEP, GC), the project will add 112 new and renovated mixed-income rental units (market rate, low-income, and public housing) totaling 162,000 sf, plus 5,000 sf of commercial/retail space.
| Nov 1, 2010
Vancouver’s former Olympic Village shoots for Gold
The first tenants of the Millennium Water development in Vancouver, B.C., were Olympic athletes competing in the 2010 Winter Games. Now the former Olympic Village, located on a 17-acre brownfield site, is being transformed into a residential neighborhood targeting LEED ND Gold. The buildings are expected to consume 30-70% less energy than comparable structures.
| Oct 13, 2010
Apartment complex will offer affordable green housing
Urban Housing Communities, KTGY Group, and the City of Big Bear Lake (Calif.) Improvement Agency are collaborating on The Crossings at Big Bear Lake, the first apartment complex in the city to offer residents affordable, eco-friendly homes. KTGY designed 28 two-bedroom, two-story townhomes and 14 three-bedroom, single-story flats, averaging 1,100 sf each.
| Oct 13, 2010
Residences bring students, faculty together in the Middle East
A new residence complex is in design for United Arab Emirates University in Al Ain, UAE, near Abu Dhabi. Plans for the 120-acre mixed-use development include 710 clustered townhomes and apartments for students and faculty and common areas for community activities.
| Oct 13, 2010
Community center under way in NYC seeks LEED Platinum
A curving, 550-foot-long glass arcade dubbed the “Wall of Light” is the standout architectural and sustainable feature of the Battery Park City Community Center, a 60,000-sf complex located in a two-tower residential Lower Manhattan complex. Hanrahan Meyers Architects designed the glass arcade to act as a passive energy system, bringing natural light into all interior spaces.
