The pandemic put most companies in jeopardy and almost every industry took a beating. Except multifamily real estate. Sometimes more is more: Rent and valuation growth are factors leading to increased multifamily construction development in 2022.
Multifamily Construction In-Demand
Economic situations led to almost double 1Q 2021 demand for rentals followed by record-high rent increases in 3Q 2021. It’s anticipated rent growth will be moderate in 2022 and rent control legislation will impact several areas of the country. For example, St. Paul, MN voted to cap rent increases at 3% annually. Rent control legislation is under review in other states, including:
- Colorado
- Florida
- Illinois
- Kentucky
- Massachusetts
- Nevada
- Pennsylvania
- Washington
…and more.
“Right now, the number of investors in the market far outpaces the number of (multifamily) properties for sale,” says business reporter Leslie Shaver. A leading apartment-owner organization that purchased 14 properties before 4Q 2021 was only able to complete one purchase in the fourth quarter. The lack of supply and increase in demand is pushing prices up, plus zoning restrictions further complicate multifamily construction development.
7 Trends In Multifamily Construction
Multifamily construction growth should remain stable, says buildcentral.com. Watch for these trends to impact how we build apartments and other multifamily housing projects:
- AI – Building contractors must utilize smart-home technology in security systems and “lifestyle efficiency.”
- Amenities – Competitive multifamily housing communities will have gyms, spas, pools, fiber internet, recycling facilities, and more.
- Competition – Look for Amazon and other warehousing/purchasing companies to aggressively compete for multifamily construction space.
- Multifunctionality – Smaller and more affordable housing must offer better, more technologically advanced usage solutions.
- Risks – Trade tariffs, supply chain disruptions, “and a dire shortage of qualified labor” will continue to plague our industry.
- Sustainability – LEED (Leadership in Energy and Environmental Design)-certified construction and “co-living,” in which renters utilize shared spaces will drive multifamily construction even more.
- Technology – Electric car charging stations and disruptive technology (rideshare apps, etc.) should be included in multifamily units.
You’ll make better construction industry-related business development and marketing decisions when you have the information you need. To learn more about construction developments in your city or town, contact Construction Monitor.
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