flexiblefullpage - default
Currently Reading

Rental Housing at a ‘Turning Point’

Advertisement
billboard - default

Rental Housing at a ‘Turning Point’

Renter households are likely to continue to grow


February 8, 2018
Building exterior
Photo: Unsplash
This article first appeared in the February 2018 issue of Pro Builder.

The Harvard University Joint Center for Housing Studies recently released its 2017 America’s Rental Housing Report, which found that rental construction was a primary driver in housing recovery post-recession, rebounding to the highest annual level since the late 1980s -- 400,000 units in 2015.

Larger buildings account for most of new rental construction. The number of completed rentals in buildings with 20 units or more rose in 2016 to 83 percent, up 29 percent from 2001. These apartments were just over one-fifth of the rental stock in 2016, at 9.9 million units. This was an increase of 37 percent, more than 2.6 million units, from 2001. 

Survey data show that the number of single-family rentals (detached, attached, and mobile homes) increased by only 74,000 units between 2015 and 2016, well below the 400,000 annual increase averaged between 2005 and 2015. The slowdown in single-family conversions is a contributor to the growing share of new multifamily units in all of new rentals being built. 

Higher-income households, primarily located in high-rise buildings in downtown neighborhoods with high construction and land costs, are being targeted for new rental housing. The current surge in high-end construction is linked to increasing costs; between 2012 and 2017, the price of vacant commercial land was up 62 percent. Concurrently, the combined expenses of construction labor; materials like gypsum, concrete, and lumber; and contractor fees rose 25 percent, outpacing the general inflation rate of 7 percent. According to estimates included in the Joint Center for Housing Studies’ report, the costs of building a basic, three-story apartment building increased by 8 percent from 2016 to 2017. Strict land use regulations also increase costs by limiting the land zoned and available for higher-density housing and requiring lengthy approval processes.  

The report concludes the number of renter households will likely experience sustained and robust growth, driving the need for more supply in a variety of rental housing options.

Advertisement
leaderboard2 - default

Related Stories

Labor + Trade Relations

Who's Earning What in Construction

Workers in construction management roles may earn a higher median wage, but on average, lower-paid occupations have experienced somewhat faster wage growth

Build to Rent

Build-to-Rent Is Booming, Particularly in These Metros

A recent report finds that the Phoenix metro leads with more than 4,000 build-to-rent units completed in 2023, and Texas is the leading state for build-to-rent development

Sustainability

Which Green Building Practices Are Home Builders Using Most?

A recent report reveals which green-building practices are most popular among single-family home builders and remodelers

Advertisement
boombox1 -
Advertisement
native1 - default
halfpage2 -

More in Category

Delaware-based Schell Brothers, our 2023 Builder of the Year, brings a refreshing approach to delivering homes and measuring success with an overriding mission of happiness

NAHB Chairman's Message: In a challenging business environment for home builders, and with higher housing costs for families, the National Association of Home Builders is working to help home builders better meet the nation's housing needs

Sure there are challenges, but overall, Pro Builder's annual Housing Forecast Survey finds home builders are optimistic about the coming year

Advertisement
native2 - default
Advertisement
halfpage1 -

Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.


Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Subscribe
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.