Here's some recent data from RENTCafe looking at the supply of new multifamily rental apartments in the US. About 334,000 rental units are expected to be completed and occupied this year, which is a decline from the 2018 peak of 357,000 units, though still a relatively high number. This year is expected to be the fifth consecutive year where supply is greater than 330,000 units. Below you can also see how this breaks down across the largest MSAs (metropolitan statistical areas).
For this study, RENTCafe looked at new apartment construction data for buildings with 50 or more units (so no smaller infill projects). It covers 109 US metro areas. To determine whether a building is likely to be completed in 2021, they looked at confirmed certificate of occupancies and also used some sort of fancy algorithm to predict the likelihood that an under construction project will get one before the year is out.
For more on their study, click here.
This week I saw it reported that in this decade alone, the Seattle area is set to deliver more new rental apartments than it did in the prior 50 years combined.
And as a result, the sentiment is that new housing supply is finally starting to keep pace with demand and put downward pressure on rents.
Do you remember who was the crane capital of the US a year ago? They may still have that title.
In some of the most desirable neighborhoods of Seattle – where much of the new supply is coming online – rents dropped 6% compared to the prior quarter. At the county level, this last quarter was by far the biggest drop of the decade according to the Seattle Times.
Funny how that works.
It’s also worth noting that the US as a whole is building far more rental apartments than condominiums. Here is a post I wrote in August 2015 which pegged condos as a percentage of overall multifamily construction at around 5.5%. That’s a tiny percentage.
There’s a lot of interest right now in micro apartments. Here is a recent example from New York City. Generally speaking the model is driven by a need to increase housing affordability: shrink the apartments; lower the prices.
To compensate for these smaller units, the buildings are often equipped with larger shared spaces and a desire to create a sense of community.
The below TED talk by architect Grace Kim is an interesting case study of a project that started, first, with a desire for cohabitation. Her thesis is that cohousing can make us happier, less lonely, and more socially connected.
The cohousing community that she profiles is one that she both designed and developed and one that she now lives in and practices architecture out of.
If you can’t see the video below, click here. It’s only 10 minutes. After you’ve watched it, let us know in the comment section below if this is a community you could see yourself being a part of.
https://embed.ted.com/talks/grace_kim_how_cohousing_can_make_us_happier_and_live_longer