10 Cities with the Most Multifamily New Construction Projects
As property values continue to go up, the multifamily industry has risen in popularity as well. Millennials who can’t afford the pricey mortgage rates are sticking with the rental market, making multifamily properties seem more desirable to investors. According to RealPage’s data, approximately 399,000 units have been approved to commence construction nationally in the last year. The overwhelming demand has pushed the construction of thousands of apartments in some of the United State’s most popular cities. Below are the top 10 cities in the United States with the most multifamily new construction projects.
(1) NEW YORK CITY, NEW YORK
With more than 30,000 units approved, New York City tops the chart with the highest number of permitted construction of multifamily units in the United States. The area with the most development is Brooklyn, followed by Manhattan, Queens, and the Bronx. In fact, there were approximately 6.2% more units permitted this year than last year.
(2) DALLAS, TEXAS
Second on the list is Dallas. With over 18,900 units permitted for construction, Dallas has become a popular area for development. Until now, Dallas development rates have risen astronomically over the years. This booming multifamily industry causes economists to predict a naturally slowdown. In fact, even though the development level is still high, Dallas experienced an approximately 19.8% decline in permitted units from last year.
(3) LOS ANGELES, CALIFORNIA
Easily labeled as one of the United State’s most iconic cities, Los Angeles has always been a popular city to relocate. Los Angeles multifamily market has been growing at a rapid speed as the population outgrows the supply of apartment buildings available in the area. In fact, Los Angeles has an approximately 10.6% increase in permitted units compared to last year’s rates. That is equivalent to approximately 15,300 permitted units. The most concentrated area of development in Los Angeles is Downtown. The most recent approved project in Downtown is the Fashion District Residences, which is a 33 story high rise complex with 452 apartments.
(4) SEATTLE, WASHINGTON
With over 13,300 permitted apartments since August 2016, Seattle is also experiencing rapid multifamily growth. In fact, there has been an approximately 7.9% increase in permitted units since last year. Amazon’s move into Seattle has significantly impacted the growth in Seattle’s residential market, causing developers to pour their resources into the area. An example includes the GZI Boren multifamily development in the Denny Triangle, which already has 33 approved/pending projects. This will account for approximately 10,000 units and 3.5 million square foot of office space.
(5) DENVER, COLORADO
Denver's housing market is pretty steep, making apartment buildings exceptionally popular. In fact, residents tend to opt for rental units and convenient locations as opposed to purchasing an expensive home. In the last year, Denver has experienced an approximately 43.4% increase in approved units since last year, totaling over 13,100 units since August 2016.
(6) CHICAGO, ILLINOIS
Chicago has always been a hot real estate market. Apartments are in such high demand that developers are designing micro-apartments to meet demand. In the last year, there are over 11,000 units approved, which is a 35.5% increase from last year. Several high density projects such as the 138 unit micro-apartment project in Logan Square, the 263 unit project in Fulton Market, and the 160 unit development in Noble Square assures the continual growth of the rental market.
(7) AUSTIN, TEXAS
Unlike Dallas’ decline, Austin is actually experiencing high demands for rental properties. There is an increase of 5.7% in approved units as compared to last year, creating over 10,565 units since last August.
(8) ATLANTA, GEORGIA
Although still experiencing high volumes of approved units, Atlanta has dropped approximately 21.7% in approved permitted units as compared to the prior year. However, there are several tax abatement incentives from the county that is working to encourage developers to continue adding units to the area.
(9) WASHINGTON D.C., VIRGINIA
Although there is less development activity than other areas, Washington D.C. has over 7,000 approved permitted units, which is around a 2% increase compared to last year. Despite the low percentage, Washington D.C is actually undergoing the largest multifamily boom in its history. This city is one of the most expensive in the country, but it is not deterring developers from starting new development projects in the area. Unfortunately, permits are still being passed at a relatively slow rate, minimizing growth in the area.
(10) MIAMI, FLORIDA
Miami is a hub of entertainment, making it more attractive to Millenials. This popularity helps drive the rental market in the city. With an increase of approximately 43.2% approved permitted units compared to last August, Miami comes in as the second largest increase in multifamily permitted units. There are approximately 8,600 units permitted since August 2016.
Overall, the number of permitted units in new multifamily construction projects has increased drastically since last year. Although the above cities are not the only cities with high levels of permitted units, these cities are driving development in some of United State’s most sought after cities. As this trend continues, the number of permitted units in the United States is expected to grow as well.
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