And that certainly won’t change with Germantown, Md.-based developer Mid-City Financial Corporation’s vision for 2,200 units on a sprawling eight-city-block project near the Rhode Island Avenue Metro, according to The Washington City Paper.
Despite the high unit count, the project will fill a void, at least partially. The project, which replaces the 535-unit affordable Brookland Manor development, is 20-percent affordable and the developer tells the City Paper that it will add some more income-restricted units to the unit mix.
Still, that equals a net of more than 1,500 units to the nation’s capitol. Right now, 26,500 units are expected to come online in the next 24 months, while the 36-month development pipeline edged up slightly to 40,175 units according to Alexandria, Va.-based research firm Delta Associates.
Only 1,615 units broke ground in D.C. in the third quarter, which was the lowest quarterly total in three years, But that slowdown will be short-lived since Delta expects starts to be “elevated” through the end of the year.
Somewhat surprisingly, the market has weathered the new supply, so far. Delta reports that stabilized vacancy rate for all classes remained at 4.1 percent over the past year, though Class A vacancy rose 70 basis points to 4.6 percent in September. Across the metro area, rents actually edged up to 1.1 percent for Class A apartment due to “unprecedented absorption levels” over the last year, according to Delta. In total, 10,663 Class A units have been absorbed over the past 12 months. Delta says that’s 77 percent ahead of its long-term average.
Delta expects that trend to continue.
“Absorption of Class A units over the next 36 months will likely be significantly higher than the region’s long-term average of 5,925 units per annum,” Delta said in the release. “This projection is predicated upon the 'de-nesting' and 'un-grouping' of potential renters currently living with parents or roommates, along with job growth and the ratio of renters to owners staying the same or increasing.”