New multifamily housing needed to meet rising demand
By Donovan Geske
The multifamily housing market is hot – and it’s showing no signs of slowing down. About 4.3 million new apartments are needed by 2035 to meet the rising demand for rental housing, according to the National Multifamily Housing Council (NMHC) and National Apartment Association. That’s 266,000 new units each year, in addition to the 600,000 units needed to fill the gap created by the 2008 recession. While working with our clients to provide a variety of multifamily housing options and keeping up with industry news, I’ve observed three main factors creating this demand.
First, the work-from-home response to the Covid-19 pandemic created a migration out of large cities into secondary and tertiary cities, as many people were no longer commuting to work. Populations in rural and suburban areas close to larger cities increased during the height of the pandemic, according to PEW Stateline research.
Second, existing properties are aging out. Greater expectations for amenities and prime locations are met by building new greenfield buildings that are initially designed with these expectations in mind, rather than renovating existing buildings at a higher cost. Developers look for urban infills and underdeveloped properties that can be transformed into mixed-use, amenity-rich housing that is easily accessible.
Third, the U.S. has been underbuilt for nearly 20 years – a problem that was exacerbated by the 2008 recession when construction slowed for both single and multifamily housing. Though all types of multifamily housing (low-, mid-, and high-rise) are growing, there is still an expansive gap in available housing across the country.
Affordable, workforce, market-rate, senior living, and student housing markets are all in demand, and we’re working with our clients to create innovative solutions. The new, 18-story 921 Howard mixed-use project, for which IMEG provided structural engineering design, is one of the largest affordable housing projects in San Francisco in the last 10 years and will pursue a GreenPoint certification for its sustainable design. This community-minded development will include 203 affordable homes for people with low to moderate incomes and will provide a built-in support network to help residents adjust and remain stably housed.
Projects like these are beginning to chip away at meeting the demand for housing across the country. We will continue to find innovative solutions to providing the amenities that apartment dwellers and owners expect in their housing facilities.