Brace yourself. I’m about to unleash a tsunami of data to make the argument that the multifamily market is still going strong, despite all the sturm und drang about the coming global economic slowdown and its possible negative effect on apartment starts. Thanks to economist Danushka Nanayakkara-Skillington, the NAHB’s Assistant Vice President for Forecasting & Analysis, and Robert Dietz, PhD, NAHB Chief Economist, who presented the data at the 2019 NAHB International Builders’ Show.
Multifamily housing starts should hit 379,000 units this year. That’s 2% down from 2018’s 386,000, but well ahead (by 10%) of the average for multifamily starts from 2000 to 2007 and not that far off of the post-recession high of 394,000 in 2015.
Multifamily’s share of total housing under construction continues to run in the mid- to high-50% range. That’s probably because single-family construction has still not fully ramped up, although its slope is still up and to the right.
Rental production continues to dominate multifamily construction. The built-for-rent share of multifamily construction has held steady in the 90-95% range for the last five years. Somewhere in America there are brave souls who are building condominiums and for-sale townhomes, but apparently they are few and far between. Demand for rental at all price points continues to be the guiding force in the multifamily market.
According to the Joint Center for Housing Studies at Harvard University,
nearly half of all renters (47%) are “cost-burdened”: they pay more than 30%
of household income for their apartments. Of these 20.8 million cost-burdened
renters, 11.0 million pay more than half their family income for shelter.
Bigger projects provide the bulk of the units in completed multifamily buildings. Projects with 50 or more dwelling units supplied more than half (52%) of the 357,000 completed multifamily residences in 2017 (the last year for which U.S. Census Bureau data was available). Mid-size projects (10 to 49 units) accounted for 40% of completed dwelling units; projects with less than 10 residences yielded the remaining 7-8%. Scale matters.
Multifamily housing starts returned to 107% of normal in Q3/2018. Multifamily starts have returned to normal or above from the market bottom in 2009 in 27 states and the District of Columbia. Alabama is the only state that has not dug out of the trough since 2009.
The senior market may be slowing a bit, but it’s still positive. The NAHB 55+ Housing Market Index fell from a high of 68 in mid-2018, to 56 later in the year. Since any score over 50 indicates a positive attitude by builders and developers, it looks like the market influencers still see senior living facilities as a viable opportunity. My fellow baby boomers and I aren’t getting any younger.
To summarize, apartments are being built, and in goodly number. That’s the rosy side of the multifamily picture. The flip side is that not enough of it is affordable.
According to the Joint Center for Housing Studies at Harvard University, nearly half of all renters (47%) are “cost-burdened”: they pay more than 30% of household income for their apartments. Of these 20.8 million cost-burdened renters, 11.0 million pay more than half their family income for shelter.
Hardest hit: single-parent families and those over age 65.
Those are sobering statistics. What do you think can be done to address this problem?
Related Stories
| Aug 11, 2010
Brooklyn's tallest building reaches 514 feet
With the Brooklyner now topped off, the 514-foot-high apartment tower is Brooklyn's tallest building. Designed by New York-based Gerner Kronick + Valcarcel Architects and developed by The Clarett Group, the soaring 51-story tower is constructed of cast-in-place concrete and clad with window walls and decorative metal panels.
| Aug 11, 2010
RMJM unveils design details for $1B green development in Turkey
RMJM has unveiled the design for the $1 billion Varyap Meridian development it is master planning in Istanbul, Turkey's Atasehir district, a new residential and business district. Set on a highly visible site that features panoramic views stretching from the Bosporus Strait in the west to the Sea of Marmara to the south, the 372,000-square-meter development includes a 60-story tower, 1,500 resi...
| Aug 11, 2010
'Feebate' program to reward green buildings in Portland, Ore.
Officials in Portland, Ore., have proposed a green building incentive program that would be the first of its kind in the U.S. Under the program, new commercial buildings, 20,000 sf or larger, that meet Oregon's state building code would be assessed a fee by the city of up to $3.46/sf. The fee would be waived for buildings that achieve LEED Silver certification from the U.
| Aug 11, 2010
Colonnade fixes setback problem in Brooklyn condo project
The New York firm Scarano Architects was brought in by the developers of Olive Park condominiums in the Williamsburg section of Brooklyn to bring the facility up to code after frame out was completed. The architects designed colonnades along the building's perimeter to create the 15-foot setback required by the New York City Planning Commission.
| Aug 11, 2010
U.S. firm designing massive Taiwan project
MulvannyG2 Architecture is designing one of Taipei, Taiwan's largest urban redevelopment projects. The Bellevue, Wash., firm is working with developer The Global Team Group to create Aquapearl, a mixed-use complex that's part of the Taipei government's "Good Looking Taipei 2010" initiative to spur redevelopment of the city's Songjian District.
| Aug 11, 2010
Recycled Pavers Elevate Rooftop Patio
The new three-story building at 3015 16th Street in Minot, N.D., houses the headquarters of building owner Investors Real Estate Trust (IRET), as well as ground-floor retail space and 71 rental apartments. The 215,000-sf mixed-use building occupies most of the small site, while parking takes up the remainder.
| Aug 11, 2010
Housing America's Heroes 7 Trends in the Design of Homes for the Military
Take a stroll through a new residential housing development at many U.S. military posts, and you'd be hard-pressed to tell it apart from a newer middle-class neighborhood in Anywhere, USA. And that's just the way the service branches want it. The Army, Navy, Air Force, and Marines have all embarked on major housing upgrade programs in the past decade, creating a military housing construction boom.
| Aug 11, 2010
Loft Condo Conversion That's Outside the Box
Few people would have taken a look at a century-old cigar box factory with crumbling masonry and rotted wood beams and envisioned stylish loft condos, but Miles Development Partners did just that. And they made that vision a reality at Box Factory Lofts in historic Ybor City, Fla. Once the largest cigar box plant in the world, the Tampa Box Company produced boxes of many shapes and sizes, spec...
| Aug 11, 2010
World's tallest all-wood residential structure opens in London
At nine stories, the Stadthaus apartment complex in East London is the world’s tallest residential structure constructed entirely in timber and one of the tallest all-wood buildings on the planet. The tower’s structural system consists of cross-laminated timber (CLT) panels pieced together to form load-bearing walls and floors. Even the elevator and stair shafts are constructed of prefabricated CLT.
| Aug 11, 2010
CityCenter Takes Experience Design To New Heights
It's early June, in Las Vegas, which means it's very hot, and I am coming to the end of a hardhat tour of the $9.2 billion CityCenter development, a tour that began in the air-conditioned comfort of the project's immense sales center just off the famed Las Vegas Strip and ended on a rooftop overlooking the largest privately funded development in the U.
