Peeling back layers of the onion of fundamental demand, the quandary for stakeholders—on both the equity and debt sides of a multifamily project's capital stack—is compelling.

A warm, fuzzy feeling about demand, the inference that it is huge, and pent-up, and working like a cohesive collective conscious of need and means, ... it's all practically a given in a business and investment climate characterized best by the term Renter Nation.

And who doesn't think of multifamily demand now as a fast-swelling, fast-moving phalanx of new households, down-sizers, and refugees of failed homeownership? We see articles to the effect that homeownership is not merely having yet another challenged year, but that it may be down for the count, kaput, gone for an entire generation. Doubtful.

The decision to put one's mindfully invested capital into place in what at best is a long-term commitment is difficult in the best of times. Under multiple layers of fear and suspicion, it becomes even harder to make that choice. Up to now, those who have been selling potential investors and lenders on the "sure bet" that is multifamily development and operations have been able to back up their promises with the reality of organic fundamentals.

Where we are now is the moment we begin to see the elasticity of rent prices tested to their limit.

More and more analyses of how U.S. households are working these days focus on polarization points. Recent analyses of household income changes since the official end of the recession note that well-to-do and lower-income households have had more income traction in the low-pulse recovery than those in the middle. The cause, Wells Fargo managing director and chief economist Mark Vitner says, is, "If we’re only creating jobs for the highly skilled and for folks with basic skills, then you’re leaving an awful lot of people behind." Vitner goes on to say that without a broad-based gain among households, it's hard to sustain a recovery.

Whether multifamily enterprises' revenue management approaches to rent increases will capture insight into the multifamily demand pipeline—and measure and manage the way dislocation works—remains to be seen.

Our question is that although multifamily firms need to be assertive about assigning fair value to the homes and communities they offer renters, do they need to go so far as to make those renters angry present and soon-to-be former customers? It's one thing to price units at what they're worth, but when a few more basis-point declines in home prices could turn ownership into a real, viable option for at least some of your base of demand, it seems counterintuitive.

So, developers need to acknowledge the 800-pound gorilla in the room when they're out trying to raise debt and equity financing for their projects: All that fundamental demand everybody's talking about—the need for 300,000 or 400,000 new units of multifamily housing a year for the rest of the decade—isn't quite a slam dunk, especially if there are a lot of people whose income is not growing who are asked to make more of it available to pay their rent.

They may well be mad enough to have a comeback to the mantra, "Apartments are America's affordable housing."