Coronavirus Dents Multifamily Development
This was supposed to be a year marked by a healthy amount of new multifamily supply, as some 300,000 units were on pace to open by the end of 2020. But federal, state and local stay-at-home orders and other responses to the coronavirus pandemic will likely reduce that to around 250,000 units, according to projections by commercial real estate brokerage Marcus & Millichap and REIS, the property research arm of Moody’s Analytics.
A recent National Multifamily Housing Council survey of 135 apartment developers with projects underway found that more than half had slowed their pace of construction due to permitting delays, moratoriums on construction, and to a lesser degree, a lack of materials. Social distancing measures—allowing only one or two trade groups to work on a project at a time versus four—is also slowing construction, reported John Sebree, senior vice president & national director of the National Multi-Housing Group for Marcus & Millichap.