According to the National Multifamily Housing Council’s Quarterly Survey of Apartment Construction & Development Activity, construction and rental housing companies are still struggling with obstacles in creating new housing. These challenges include delays in construction, difficulty obtaining financing, and economic feasibility issues due to high interest rates.
The current development environment is expected to continue experiencing delays. In fact, 84% of respondents reported facing construction delays – a slight improvement from previous quarters. Among those who experienced delays, 81% cited permitting as a major cause while 92% faced start-up delays.
Economic uncertainty (83%), availability of construction financing (79%), and economic feasibility concerns (71%) were the main reasons for start-up delays.
NMHC president Sharon Wilson Géno commented on the tough market conditions for rental housing providers: “High interest rates, rising insurance costs,and increasing state and local taxes are all contributing factors that make it challenging to build new housing despite the clear demand for more affordable options across communities nationwide.”
In light of these difficulties faced by developers in this industry,the council urges lawmakers to take action on policy solutions that can help expand housing supply while reducing costs.This includes reforming affordable housing programs,reducing insurance expenses,and implementing initiatives that improve capital market conditions.
