Big cities need all the apartments they can get

Dec 13, 2022, 07:01 AM by Matt Mowell
Several months ago, CBRE Econometric Advisors chronicled how the post-pandemic surge in urban housing demand precipitated a multifamily supply shortage, causing apartment rents to become less affordable. Now, however, multifamily demand is slowing amid worrying signals about the direction of the economy.  Nevertheless, structural supply shortages remain.

Figure 1 plots the additional supply needed to bring multifamily vacancies to their pre-COVID levels. Most major cities have plenty of headroom to build more units. San Francisco, which has been slow to recover from a pandemic-induced resident exodus, is a key exception. Certain Sun Belt markets, such as Nashville and Austin, also have less headroom for new development, as rental housing supply has closely aligned with household growth.

Ultimately, CBRE expects rental housing shortages to persist in most cities as new construction starts decelerate amid higher capital costs and the likelihood of a recession in 2023.

redirect pin user minus plus fax mobile-phone office-phone data envelope globe outlook retail close line-arrow-down solid-triangle-down facebook globe2 google hamburger line-arrow-left solid-triangle-left linkedin play-btn line-arrow-right solid-triangle-right search twitter line-arrow-up solid-triangle-up calendar globe-americas globe-apac globe-emea external-link music picture paper pictures play gallery download rss-feed vcard