Across the United States, apartments create housing choices for hundreds of Americans and contribute to the fabric of communities while this industry supports 17.5 million jobs. But many municipalities are facing a common challenge: Demand for apartments is outpacing supply in the country.
According to the National Multifamily Housing Council, America needs 4.6 million more apartments by 2030. The NMHC projects that the U.S. needs to build approximately 328,000 new apartment units per year until 2030 just to meet current demand and improve affordability—but that mark only has been hit three times since 1989.
The report mentions that 243,000 new units were completed yearly between 2011 and 2017, leaving an average annual shortfall of 29.8 per cent.
Baby boomers and millennials are part of the reason there is a high rental demand in the U.S. Over 76 million people between the ages of 18 and 34 are entering the rental market, primarily as renters.
The 2021 Millennial Homeownership Report found, in 2020, that 18 per cent of millennial renters say they plan to rent forever. This number has jumped for the third consecutive year from 12 per cent in 2019 and 11 per cent in 2018. The report highlights that millennials are the largest generation in the U.S. and the age range is between 24 to 39.
The NMHC reports that there has been an increase of 60 per cent in the number of adults aged 45 or older renting in the last decade. Not only to mention that 20 per cent of U.S. households are married couples with children, which reduces the demand for traditional homes.
Also, married couples with kids are only 19 per cent of households in America. Single-person households, single-parent households and roommates account for 42 per cent of all households, which makes them more likely to rent.
However, building more apartment buildings is not enough. The NMHC highlights the need to build a wider range of housing at various price points to meet the housing needs of Americans across all income levels.
Building More Apartments Stimulates the Economy
The apartment industry in the U.S. contributes $3 trillion to the economy annually. This industry helps 40 million American residents to live in a home and creates 16 million jobs across the country. Apartment construction contributes $150.1 billion to the U.S. economy, thus creating 752,000 jobs.
Almost 50 per cent of apartments in America were built before 1980. Therefore, it is important to renovate and repair these older buildings to preserve more affordable housing for Americans. This contributes $69 billion to the U.S. economy annually and creates 340,000 jobs in the U.S.
Call For New Housing Policies
The NMHC states that new housing policies are needed in the U.S. The report mentions that rising land and construction and labour costs make it difficult to deliver housing at affordable prices for working families. Also, neighbourhood opposition to apartments and regulations such as zoning and outdated land-use planning raise those costs and rents much higher.