Multifamily Market: New Construction Quarterly Survey Highlights Longer Delays and Rising Costs

The new NMHC Construction Quarterly Survey found that a majority (89 percent) of respondents reported experiencing construction delays, and, of those experiencing overall delays, 85 percent reported delays in both starts and permitting. *** Since almost the beginning of the pandemic, the NMHC Construction Survey has proven to be an invaluable tool for informing policymakers and industry leaders about the conditions facing multifamily development. Now, at a time of surging housing demand, NMHC has launched a new, evolved version of the Survey that will continue to track challenges that have persisted beyond the pandemic and delve into new areas as well.   The first iteration of the new NMHC Construction Quarterly Survey found that problems that first originated during the pandemic continue to impact the construction industry through supply chain obstacles and ongoing delays related to issues with staffing to permitting and entitlement.   “Our nation is currently facing deep housing affordability challenges that can only be addressed through building new homes. Yet, rising costs, permitting delays and a lack of labor are making it increasingly difficult to develop housing of all types,” said Doug Bibby, NMHC President. “Lawmakers at all levels of government need to acknowledge this crisis and work with industry leaders to curb cost increases, streamline permitting and resolve supply chain hurdles.”   Nearly all respondents (92 percent) reported that deals have been repriced up over the past three months. Those experiencing deals being repriced reported increases of 25 percent on average. The price of lumber continues to be one of the more significant obstacles to apartment construction, with the average respondent reporting a 45 percent increase in prices over the past three months. This iteration of the survey specifically highlights price changes and subsequent mitigation practices for five prevalent materials including exterior finishes and roofing, electrical components, appliances, insulation and lumber.   Labor availability and logistics/transportation have also become obstacles to apartment construction. A majority of survey respondents (55 percent) reported that labor costs increased more than expected over the last three months.   More key findings from the NMHC Construction Quarterly Survey can be found here.

Based in Washington, D.C., the National Multifamily Housing Council (NMHC) is the leadership of the apartment industry. We bring together the prominent owners, managers and developers who help create thriving communities by providing apartment homes for 40 million Americans, contributing $3.4 trillion annually to the economy. NMHC provides a forum for insight, advocacy and action that enables both members and the communities they help build to thrive. For more information, contact NMHC at 202/974-2300, e-mail the Council at info@nmhc.org, or visit NMHC's website at nmhc.org.