The Driving Forces Behind Today’s Rental Market Supply levels are surging in the rental housing industry. Will rental demand keep pace with sky-high supply? What can your community do to stay competitive in this evolving market? We explore the answers to these questions and more in our latest industry analysis. February 2019 marked a historic month in Multi-Family Housing development. The industry produced 473,000 housing completions of 5 units or more. These figures are the highest they’ve been in three decades. February was not just a blip on the radar either. MFH construction has had consistent growth since late 2010. With the exception of one month, each month over the last 4 years has seen housing completions above the median of the last 31 years. Of particular interest are buildings that have at least 20 units or more. Unprecedented levels of growth have occurred over the last halfdecade among buildings this size. Developers are vying for larger
Written by Colin Turner - Conversion Logix
communities, and many cities have seen an influx of luxury skyscrapers. There are a few reasons developers are opting for this strategy. Making Room for Affordable Housing Often times, cities will have strict zoning policies. However, a compromise some cities will make is to require that the developers reserve some units for affordable housing. For example, New York City passed a law called 80/20 housing. If a developer dedicates 20 percent of units
to affordable housing they can receive “lucrative tax abatements, permission to construct larger buildings and bond financing” says the New York Times. The presence of affordable housing paves the way for our next reason these skyscrapers are being built: Fannie Mae and Freddie Mac. Financing Opens New Doors The two GSEs have moved beyond single-family mortgages and into the commercial realm. At the end of 2017, Fannie and Freddie had “a financial interest in almost $500bn of commercial mortgages,
