Doug Bibby, president of the National Multifamily Housing Council, says the multifamily industry will need to build 4.6 million new apartments between now and 2030 in order to meet demand. That prediction means an average of 328,000 new apartments every year, nearly 50% more than the industry’s five-year average pace of 225,000 completions a year.

Developers like Todd Farrell, president of LMC, are doing what they can to meet this new level of demand, including encouraging government initiatives that foster greater affordability and welcoming foreign investors seeking multifamily opportunities in the U.S.

In this short video, Farrell expresses his hope that the government expands the low-income housing tax credit (LIHTC) program while indicating that local municipalities, though well meaning, can inadvertently undermine affordability by sometimes making it harder for builders and developers to produce housing at affordable rents.

Here, Farrell also notes the great interest in multifamily among foreign investors lately, relating that the apartment industry is poised to take a good share of that capital.

John Isakson, chief capital officer at Preferred Apartment Communities, agrees that foreign capital will find a strong foothold in multifamily as a good place for medium- and long-term investments. He adds that while some affordable projects are becoming more attractive thanks to government subsidy programs and incentive financing, the many economic variables involved might put off some international investors.

“Policy changes around the FIRPTA rules, relative currency exchange rates, relative changes in interest rates, tax code changes, and the relative strength of the U.S. economy are all examples of variables that can or will impact the appeal of U.S. CRE to foreign investors,” Isakson says. 

"I believe that, generally speaking, foreign capital will continue to be a big player in the U.S. CRE market, but more in the core property types and major markets," Isakson continues. "I don't think foreign capital, as a rule, is going to migrate much into secondary markets, but [it] may drift into different property types within the major markets or move up the risk curve in the core property types (core-plus, value-add, opportunistic type deals) in those major markets.”