Regulatory reforms may be needed to boost residential urban infill projects

The pace of urban residential infill projects is slowing and regulatory reform may be needed to boost this market segment, according to a Multifamily Dive report.

In the second quarter of 2025, the market share of apartment starts in large metro core counties, where dense development is most prevalent, continued a long-term downward trend. Starts fell 12.3% on a four-quarter year-over-year moving average.

Medium and large-scale residential infill projects are now seen as more financially risky than they were several years ago, partly because due to a recent glut of projects in many metros. New supply is slowing, though, and when more units are rented, demand may rise.

Regulatory reform is needed to promote dense urban infill development, according to a National Association of Home Builders executive. Adjustments to parking requirements, permit and impact fees, and zoning/permitting rules and processes would help catalyze more development.

The bipartisan Build HUBS Act aims to boost the construction of housing near transit hubs nationwide. It would eliminate some National Environmental Policy Act requirements for office-to-residential conversions and infill development.