By Jack Stubbs
Heading into the fourth quarter of 2022, it seems that housing construction shows little signs of slowing, according to an apartment construction report released by RentCafe earlier this month. The report, titled “The Best of Times for Apartment Construction in Half a Century”, includes several key statistics that suggest the robustness of the apartment construction market.
Notably, 420,000 new apartments are expected to deliver nationwide this year, and multifamily construction in the last two years is at a 50-year high (apartment completions last surpassed the 400,000 unit mark in 1972), states the report, which is particularly noteworthy because of ongoing economic concerns and supply chain disruptions post-COVID.
“The construction industry is finally returning to pre-pandemic levels of activity but is still being hampered by three familiar challenges: labor shortages; material costs and availability; and supply chain issues,” said Doug Ressler, manager of business intelligence at Yardi Matrix.
Strikingly, 10 of the top 20 metros for apartment construction are on track to hit record highs in 2022 compared to their total deliveries in each of the last five years,” details the report.
The Seattle and Portland Pacific Northwest markets, in particular, have seen significant growth. The Emerald City delivered 12,236 apartment units in 2018 and 12,851 in 2021, with 15,341 anticipated to be delivered over the course of this year. Portland, meanwhile, is expected to deliver 8,476 units in 2022, in contrast with 2018, which saw the delivery of 5,586 units, with 6,237 having come online in 2021.
Nationwide, however, the New York metro is projected to deliver the most apartments (a record 28,153) in 2022, exceeding Dallas-Fort Worth from the top position for the first time since 2018. This figure marks an almost 50 percent increase of the number of apartments that were completed throughout 2021.
Given that the fourth quarter is fast approaching, taking a look at activity in 2022 thus far serves as a noteworthy barometer for times ahead. In terms of the top 20 cities by number of apartments built in the first half of 2022, Seattle came in third (with 3,232 units built), following closely behind Austin (4,236 units built) and Houston, which saw the construction of 4,746 units.
Despite the positive activity that occurred in Seattle during the first half of 2022, there might be difficult and uncertain times ahead due to a significant shortage of housing inventory and rapid population growth.
City officials are looking for ways to combat the ongoing housing shortage. The Office of Planning & Community Development is currently working with the Seattle Department of Transportation (SDOT) on the EIS: the updated Seattle Comprehensive Plan will guide City decisions about where the city locates housing and jobs, and where and how it invests in transportation, utilities, parks, and other public assets, according to the city’s website. The Plan evolves from the existing Seattle 2035 Comprehensive Plan adopted in 2016.
“Supply is struggling to keep up with demand in the Emerald City — which, like other major coastal cities, has been facing an extreme lack of housing for several years now,” the report states. “This pace of construction isn’t likely to slow down anytime soon: Seattle’s population is projected to hit 1 million by 2044.”