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Apartment Developers Cite Economic Infeasibility as Stumbling Block
The latest NMHC Quarterly Survey of Apartment Construction & Development Activity from the National Multifamily Housing Council found that most respondents (81% this round) continue to report construction delays. A majority of respondents experiencing delayed starts cited economic infeasibility (74%), economic uncertainty (62%) and the availability of construction financing (68%) as reasons for their setbacks.
More positively, the share of respondents reporting construction delays (81%) declined for three consecutive quarters (90% in June, 88% in September and 84% in December). Labor availability and costs also improved, according to NMHC.
“It’s clear that housing providers continue to face notable headwinds as they look to create much needed housing,” said NMHC President Sharon Wilson Géno. “High interest rates, increasing insurance costs, regulatory risk, and rising state and local taxes all make the feasibility of new projects challenging.
“However, there is reason for confidence. There seems to be greater economic stability as it looks like interest rate increases have at least paused for now. Given the market forces facing housing providers, we encourage lawmakers to reject policies that make the creation of new housing even more difficult, such as rent regulation and other related proposals, and instead, act now to remove regulatory barriers to housing development.”
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- ◦Development
- ◦Financing
