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NEW YORK – The number of new rental apartments coming to the market is on the rise across the United States, with more buildings taller than before as local officials revise zoning and other laws and institutional investors fuel construction in smaller cities.
The number of apartments entering the market is more than at any time since the 1980s. Between 2021 and 2023, U.S. cities added more than 2,900 buildings with over 200 apartment units per building, 17% more than were constructed between 2018 and 2020.
Property data from Yardi also showed it outpaced the increase in smaller properties of at least 50 units over the same period. About 14% of high-rises in 2022 were apartments, up from just 2% in the 1990s.
Part of the reason apartment buildings in cities are getting taller is because multifamily developers need to build more apartment units to make a profit as construction costs continue to rise and available land is minimal.
Yardi also noted that the average square footage of a new apartment dropped 6% between 2013 and 2022. With some downtown areas adding new jobs and residents and home and mortgage prices still too high for buyers, demand for apartments is steady.
Source: Wall Street Journal (03/04/24) Parker, Will
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