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Multifamily developers continue to grapple with project feasibility. According to the National Multifamily Housing Council’s quarterly construction survey in March, 81% of respondents reported construction delays; however, this share has declined for three consecutive quarters.

For those experiencing delays, according to the survey conducted between March 5 and 19, 79% cited permitting and 87% cited setbacks for starts. Respondents attributed the starts delays to economic feasibility, 74%—up from 71% in the prior quarter—and the availability of construction financing, 68%—down from 79% in the prior quarter. Economic uncertainty decreased to 62% this quarter from 83% in December.

“It’s clear that housing providers continue to face notable headwinds as they look to create much-needed housing,” said NMHC president Sharon Wilson Géno. “High interest rates, increasing insurance costs, regulatory risk, and rising state and local taxes all make feasibility of new projects challenging.”

Labor availability and costs improved for developers for the quarter, with the share of respondents reporting construction labor to be more available jumping to 40% from 19% in December. The share of respondents who thought labor costs increased more than expected fell to 2% from 20% in December, while 51% cited no increase in labor costs.

Price increases also moderated for tracked materials, except for lumber, which remained flat after having declined for the preceding seven quarters. Respondents cited a 1% average increase over the last three months for both appliances as well as exterior finishes and roofing. In addition, respondents cited a 4% average increase for electrical components and a 2% average increase for insulation.

Wilson Géno added there is a reason to have confidence. “There seems to be greater economic stability as it looks like interest rate increases have at least paused for now. Given the market forces facing housing providers, we encourage lawmakers to reject policies that make the creation of new housing even more difficult, such as rent regulation and other related proposals, and instead act now to remove regulatory barriers to housing development.”