Fannie Mae multifamily economist Tanya Zahalak examines the smaller side of the multifamily industry, buildings with five to 50 units, often a key source of affordable housing.

Across the nation, there are about 4.4 million units located in small multifamily buildings, according to CoStar Group, and nearly three-quarters of them are found in just 10 states. California and New York lead the way, with the Golden State containing nearly one-third of the nation's small multifamily dwellings, followed by Illinois and Florida.

But the new-construction pipeline certainly favors higher unit counts, which may only exacerbate the affordable housing crisis:

Over the next decade, the nation’s multifamily stock will likely see an influx of higher unit count properties. As older small multifamily rental properties age and/or fall into disrepair, they will likely be replaced with properties with more density per square foot.

Developers will likely create more, but much smaller, units on the same-size lot. As a result, these small multifamily properties may end up moving out of the 5-50 unit category and push up into the 50+ unit category, making preservation of the existing stock of small multifamily rental properties offering more affordable rents even more critical.

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