The multifamily housing market is experiencing a surge in new rental apartments, with the number of buildings with over 200 units increasing by 17% between 2021 and 2023. This trend can be attributed to several factors, including relaxed zoning laws and investments from institutional players in smaller cities.
According to a report by the Wall Street Journal, developers are taking advantage of these favorable conditions to build bigger and taller multifamily structures than ever before. This approach not only reflects the changing economics of the industry but also addresses current demands in the housing market.
Rising construction costs have made it necessary for developers to increase unit counts in order to turn a profit. Additionally, limited availability of land has led to an increase in building height as developers seek ways to maximize space.
Despite slower rent growth compared to previous years, renting remains an attractive option due record-high prices for homes on sale. As such, many highrise developments continue despite initial plans being made during times when rent growth was higher.
In conclusion,the demand for larger multifamily buildings is driven by various economic factors that make this type of development more profitable and sustainable than smaller projects.
