Photo: Robert Clark
US apartment construction levels are at their highest level in two decades, with the New York metro area leading the way. But according to a new report by the listing site RentCafe, that still may not be enough to meet demand.
This year the total number of apartment completions is expected to rise 21 percent to 345,000, up from 285,000 in 2016, according to data from RentCafe’s sister site Yardi Matrix. Most major metros have seen “significant” increases in their apartment housing stocks, says Yardi Matrix.
Following the Great Recession, apartment construction levels slowly began rebounding in 2012, and by 2014 they had surpassed 237,000 apartments delivered for the year — well above historical averages. According to Yardi Matrix, between 1997 and 2006, annual completions averaged 212,740 units.
Some 27,000 new apartments are expected to come online in the New York metro area alone this year, up significantly from 17,000 delivered last year. And, according to Yardi Matrix, the metro’s occupancy rate is about 98 percent.
The New York metro area ranks as the best apartment market in the country. It has the most new units coming to market in the country this year, flat population growth, and 1.5 percent annual wage growth from last year.
Within the metro area, Manhattan has the most projects expected to deliver in 2017. Around 7,023 new apartments will hit the market by the end of this year, only slightly more than the 6,894 coming to market in Brooklyn this year.
Bustling Jersey City has about 2,000 new apartments hitting the market this year, accounting for more than half of the 3,510 total units for the Northern New Jersey area.
Yet, even with the current boom in apartment construction, it still may not be enough to meet demand. According to the National Multifamily Housing Council, some 4.6 million new apartments would need to be built by 2030 to meet demand and keep prices in check — or about 373,000 new units annually. This year’s impressive tally is still about 28,000 units short to stay on track for 2030.
“New construction and lack of affordable supply continue to hamper the New York Market. Governmental Policy and Business will need to be employed in a collaboration to build the housing stock necessitated by the NYC metropolitan area,” Yardi Matrix researcher Doug Ressle tells BuzzBuzzNews.
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