Is Townhome Construction Is Becoming More Difficult to Navigate?

Townhomes usually deliver greater affordability, but recent research from John Burns Research and Consulting shows it may not always be the case. In some markets, attached single-family product is becoming financially and logistically unworkable, reducing housing supply and eroding attainability.

Still, 61% of builders surveyed reported working on more townhome projects than the year before. While this figure indicates demand for townhomes, getting them built is becoming more difficult.

Not only are the costs of materials and labor rising, but insurance is also becoming more costly for townhome developments, especially for larger communities that require master insurance policies. Additionally, some areas are becoming more challenging to build in due to strict regulations at the local level.

In many markets, cities are making townhomes harder to build.

• Stricter architectural standards (e.g., varied facades, rooflines) are raising per-unit costs.
• Alley requirements in some jurisdictions now resemble full public street specs, adding unnecessary infrastructure.
• Political resistance to higher density persists, with some municipalities hesitant to approve attached products at all.

To stay nimble, developers are seeking entitlements that allow them to pivot between attached, duplex, and detached formats based on regulatory or market feedback.