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As of November 2023, it was estimated that there were 988,000 homes under construction in multi-family buildings containing 5 or more units. This is in comparison to 680,000 single-family homes, according to US Census data. (Looking at the below graph, it's also interesting to see how the supply of single-family homes dropped off after the global financial crisis and multi-family apartments took off.)
All of this means that in 2024, the US is on track to complete more apartments than it has in many many decades. In fact, exactly similar to what we experienced here in Toronto, if you want to find a comparable multi-family supply number, you need to go as far back as the 1970s (see below). Of course, the US had fewer people back then, and so on a per capita basis, it was building more housing.
Still, all of this new supply is having an impact. Apartment List recently published its national rent report, over here. And overall, it found that:
Rent increases are currently being moderated by a robust construction pipeline expected to deliver a decades-high number of new apartment units in 2024.
More specifically, they found that the cities with the most supply are now seeing the largest rent declines:
Many of the steepest year-over-year declines remain concentrated in Sun Belt cities that are rapidly expanding their multifamily inventory, such as Austin (-7.4 percent year-over-year), Raleigh (-4.4 percent), and Orlando (-3.9 percent).
If you're an apartment developer, this is not what you want to see. It means that increased competition is creating downward pressure on rents and that vacancy rates are probably rising. But if you're someone looking to rent an apartment, this is exactly what you want to see. You want more affordable housing. And so, as a consequence, you want more homes to be built. Because when supply outstrips demand, this is what you get.
Charts: Apartment List
In the second half of the 19th century, the way Londoners had historically lived, started to change:
In the 1870s, a striking change was occurring in the residential habits of London’s elite. After centuries of living close to the ground in houses,
My friend Alex Feldman sent me an article from the Philadelphia Inquirer this week called: Why is it so hard to build family-sized apartments in Philadelphia? As is the case in many/most North American cities, the article talks about how the majority of new multifamily builds are filled with studios and one bedrooms.
It then goes on to suggest that some of the reasons for this include: cultural biases in favor of suburban living, antiquated building codes (such as the requirement for two means of egress), exclusionary zoning ordinances, bad urban schools, financing availability, and so on.
This is something that we have talked about many times before on the blog and, while I do agree that it's complicated and that there are many variables to consider, I think the key factor remains price. As I said before: "Everybody wants a 3 bedroom condo until they see what they cost."
So I think this is probably the most important point in the article:
Partly that’s because Philadelphia, unlike Boston, New York, and Washington, has a vast supply of rowhouses that are still affordable to people in a position to buy. For those who prefer new construction, the past couple decades have seen a burst of modern rowhouse building.
If large multi-family apartments were more cost effective than Philadelphia's vast supply of rowhouses, I am certain that demand would increase markedly. But that is not the case. So I think a more accurate way to view large apartments is as a luxury good. They're a terrific way to live, if you can afford it.
The resulting housing typology was something known as the mansion block. And as the name suggests, one of the principal design ideas was that these blocks should, ideally, look like a single giant mansion. In other words, the individual homes were to be obfuscated:
The mansion block was a grand building that borrowed elements of the English terraced house (as a row house is known in British English), particularly the elite “palace fronted” terraced houses designed by Scottish architect Robert Adam and his brothers a century earlier, which concealed individual houses behind a grand facade to resemble a single palatial structure.
It is a design approach that makes sense. I mean, I can see wealthy people wanting to appear as if they're living in a palatial mansion. That said, it is an approach to multi-family housing that feels somewhat foreign today. Most people don't look up at tall buildings and wonder if it's one person's home.
And we don't aim for that.
Presumably this is, at least partially, because scales grew, builders were looking for economies of scale, and because modernism told us that mansion-looking structures were outdated. Whatever the reasons, multi-family buildings today are not generally conceived of as sub-divided mansions.
What's maybe ironic about this shift, though, is that we went from elaborate and varied facade designs intended to communicate single structures, to modern and repetitive facade designs that, somehow, better communicate the individual homes.
I suppose we got used to the "foreign fashion of living in flats".
Image: Josh Kramer for Bloomberg CityLab
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