The U.S. will need to build 4.3 million new apartments by 2035 to tackle “demand, deficit and affordability,” reveals a new study conducted by the National Multifamily Housing Council and National Apartment Association.
The estimate includes a rise in demands across all 50 states, 50 metro areas and the District of Columbia. The data shows 40% of the demand will stem from Texas, Florida and California, with these states representing 1.5 million in new unit demand over the next 13 years, according to the research. The study considers only those rental apartments in buildings with five or more residences.
“The new demand research shows that despite economic uncertainty and the growth during the pandemic in single-family sales and new products such as build-to-rent, the underlying fundamentals for multifamily remain strong,” Caitlin Walter, NMHC vice president of research, told Multi-Housing News.
The NAA believes many metropolitan areas will encounter a rise in apartment demand, but says a national scale the growth will be stunted until 2035.
One notable factor impacting apartment demand was immigration to the U.S., which gradually declined before the COVID-19 pandemic and has remained low, according to the study. The report predicts demand will increase as immigration rises.
The research also partially attributed “underbuilding”, or a deficit of 600,000 apartments, to the 2008 financial crisis. The estimated 4.3 million units in necessary inventory includes this deficit. The study also included an estimated 3.8% increase in homeownership rates to its forecast.
Another key finding of the study shows a decline of 4.7 million units in affordable housing, defined as those with rents of less than $1,000 per month, between 2015 and 2020.
In other proptech news, Built Technologies acquired commercial deal management platform Nativ. PriceLabs also secured a $30 million investment from Summit Partners to scale its vacation rental revenue management platform.