Home News Millions of new U.S. apartments will be needed to meet growing rental demand

Millions of new U.S. apartments will be needed to meet growing rental demand

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A shortage of rental housing in many major U.S. cities, including Dallas and Fort Worth, has led to sharp declines in apartment vacancies and sharp rises in rents.

To keep up with demand and address the shortage, apartment developers will need to build more than 4 million units nationwide over the next 13 years, says a new industry report.

North Texas will add more than 19,000 apartments annually, according to research by the National Multifamily Housing Council and the National Apartment Association.

There is currently a shortage of approximately 600,000 apartments in the United States. Demand for affordable units is even greater.

The number of U.S. apartments priced under $1,000 per month fell by 4.7 million between 2015 and 2020, according to industry analysts.

Texas, Florida and California will need 1.5 million apartments by 2035, representing 40% of the nation’s buildings, apartment industry researchers say.

“The lack of available housing is holding back the country,” said Doug Bibby, president and CEO of the National Multifamily Housing Council, in a statement. “By 2035, we need a massive amount of housing for sale and rental, including millions of new apartments, whether multi-family, two-family or single-family homes.”

A slowdown in construction during the Great Recession, restrictive zoning laws, and rising construction costs have resulted in the total number of apartment buildings falling short of needs in many metropolitan areas.

“Simply put, there is not enough housing.” The U.S. will have to build 3.7 million new apartments to meet future demand, plus a deficit of 600,000 and an affordable 4.7 million. affordable apartments are being lost.

“After decades of construction shortfalls, we will reverse course and instead pursue responsible and sustainable policies that not only meet this demand but also address the shortage and loss of affordable housing stock. The time has come.”

The shortage of rental units is especially acute in markets including D-FW, where thousands of people move each year and need housing.

More than 20% of D-FW condominiums are over 40 years old.(National Multifamily Housing Council)

Less than 4% of North Texas apartments are vacant, according to RealPage’s latest estimates. Median mid-year rents in the area also rose 17.4% year-over-year to a record high of $1,526 in the Dallas area and $1,374 in Fort Worth.

More than 20% of the apartments in the D-FW area are over 40 years old.

Demand for D-FW apartments is expected to accelerate in the coming months and next year as rising housing finance costs keep many potential buyers out of buying a home.

D-FW leads the nation in collective housing, 56,166 units are under construction.

“For D-FW, construction has averaged 15,200 units per year over the last 20 years, so adding 19,200 units per year over the next 14 years is probably reasonable, but maybe a bit conservative given future demand. may not,” said RealPage economist Jay Parsons. “As you know, development is very cyclical.

“So today’s highs will be smoothed out in the long term by future lulls,” Parsons said. “D-FW will complete 22,500 units this year, and in 2023 he expects 32,700 units to be completed. After that, shipments will start to decline.”

Parsons said apartment construction across the country is at a 40-year high.

“Of course, we rarely maintain that pace for very long,” he said. “History tells us that by the time developers slow down supply, that’s when we start needing more supply again.”

The apartment industry estimates that D-FW’s multifamily operations add $5.4 billion to the local economy each year (including $2.2 billion in property taxes) and support 9,000 local jobs.

A new industry forecast estimates that D-FW will need about 250,000 new apartments by 2035.

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