The Availability Of 1 Million New Rental Housing Units By 2025 Has Been Revealed In A Recent Report
The upcoming two years promise a significant boost in the housing market with an anticipated completion of 1 million new rental housing units, according to RentCafe’s comprehensive annual Apartment Construction Report. This surge in rental housing construction is not just a numerical prediction; it unveils an intricate pattern of regional growth, varied accessibility, and future trends in the multifamily building sector.
RentCafe, utilizing extensive data provided by its sister company Yardi Matrix, has outlined a fascinating forecast for the rental housing market. The numbers are particularly impressive, with 460,860 new apartments expected to open their doors in 2023. The momentum continues into 2024 with 484,000 new units, before experiencing a slowdown in 2025 to 408,000 newly built units.
New York City stands out as the leading metropolis for apartment construction, reflecting an ambitious urban growth strategy. An incredible 33,000 new rental units are set to be available by the end of this year. The distribution within the city reveals that Brooklyn will host the majority of these new units, with 9,825 apartments, followed by Queens with 4,430 new rentals, and Manhattan featuring 3,770 new living spaces. This concentrated development highlights New York’s continual effort to address its housing demands.
But New York isn’t alone in this housing expansion; other key markets across the country are also expecting a significant increase in apartment availability. The Dallas metro area is set to welcome 23,659 new rentals by the year’s end, Austin is not far behind with 23,434 new rentals, and the Miami metro area is preparing to host 20,906 new units in total. These figures emphasize the nationwide effort to accommodate the growing need for housing.
However, the report also uncovers a challenging aspect of this growth – accessibility. A striking 60% of the new units constructed from 2020 to 2022 remain accessible to only 41% of the renter population. RentCafe’s analysis determined that the pandemic-era apartment boom was predominantly clustered in just 20 high-growth metros, leaving many areas undersupplied. Moreover, a whopping 89% of the apartments completed in the last three years were high-end offerings rather than affordable housing, illuminating a critical disparity in the market.
Peering into the horizon of 2025 and beyond, the report suggests that the current multifamily building flurry is expected to decelerate. Doug Ressler, manager of business intelligence at Yardi Matrix, elaborates on the contributing factors, stating, “Tightening of bank lending standards — combined with rising costs of construction materials, labor, and land — has made new projects harder to pencil.” This prediction warns of impending challenges that the industry must face.
In conclusion, RentCafe’s annual Apartment Construction Report paints a vivid picture of the dynamic rental housing landscape. While the next two years herald unprecedented growth, particularly in major metropolitan areas, they also reveal critical issues related to accessibility and affordability. As the industry prepares for a predicted slowdown in the latter half of the decade, the lessons learned from this period of growth will undoubtedly shape future strategies and approaches in housing construction and urban planning.