LAS VEGAS (National Association of Home Builders) – The slowdown in multifamily housing construction is likely to create an apartment shortage in the near future, industry experts with the National Association of Home Builders (NAHB) said Tuesday.
New multifamily construction has been crippled by the credit crisis, leaving the industry unable to gear up for the increased need for market-rate and affordable apartments that is expected to accompany economic recovery beginning next year.
“We desperately need lenders to begin financing apartment communities again,” said NAHB Chief Economist David Crowe. “The vacancy rate for apartments is elevated now, but as the economy recovers and jobs return, the people who’ve been doubling up with relatives and friends will want a place of their own – and there may not be one available.”
Industry experts expect demand to outstrip current supply by mid-2011, with increasing shortages of rental housing through 2014. This is very likely to increase market-rate rents as much as 8 to 10 percent per year in 2011 and 2012, and by 4 to 7 percent per year thereafter through 2015.
However, they pointed out that this data is national, and that the severity of the situation will vary from market to market.