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Rental Housing Developers Continue Facing Headwinds
Construction and rental housing firms continue to face challenges in the creation of new housing, the National Multifamily Housing Council said Thursday in reporting its Quarterly Survey of Apartment Construction & Development Activity. Delays in construction, a lack of financing and the overall economic infeasibility of projects caused by the interest rate environment continue to confront the market.
Delays are still an expected feature of the current development environment. Eighty-four percent of respondents reported construction delays, a slight improvement from the two prior quarters. Of those experiencing delays, 81% reported delays in permitting and 92% reported start delays.
Delays in starts were largely attributed to economic uncertainty (83% of respondents, up from 57% last quarter), availability of construction financing (79% of respondents, 78% last quarter) and economic feasibility (71% of respondents, up from 61% last quarter).
“This continues to be a challenging construction market for rental housing providers,” said NMHC president Sharon Wilson Géno. “High interest rates, rapidly increasing insurance costs, skyrocketing state and local taxes are all coming together to make it difficult to build new housing despite the clear need for more housing of all types in communities throughout the country.
“Because of these tough market conditions lawmakers should act on policy options they can pursue to expand housing supply and lower costs, including expansion and reform of affordable housing programs, relief on insurance cost and other initiatives that will improve capital market conditions.”
- ◦Development
