Apartment Renovations Could Help Stem Future Housing Shortage
Digested from “Aging Apartments: What Does It Mean?”
The Balance Sheet, Yardi Corporate Blog (3/19/15) Theiss, Eliza
Although multifamily-housing construction recently hit prerecession highs, the U.S. could soon have an apartment shortage — particularly of affordable to moderate-income units — due to aging rental stock.
Almost 60 percent of U.S. apartment buildings with 20 or more units were constructed before 1980, according to the U.S. Census Bureau’s 2012 American Community Survey. More than 50 percent of affordable to extremely low-income units were built 50 or more years ago.
The recent multifamily construction boom has added new high-end apartment units to many metro areas, but moderate-income to affordable apartment housing has not been replenished.
In a 2014 report, the Joint Center on Housing Studies of Harvard University predicted that demographic forces could increase renter households by 4 to 4.7 million by 2023. Based on recent multifamily starts, 3.1 million new apartment units will come online by 2025, leaving a potential need for 1 million or more units.
This gap could be bridged, while also maintaining affordable to moderate-income units, through renovation of older apartment communities.