Significant challenges—including delays in construction, a lack of financing options, and economic infeasibility of projects— continue to hinder multifamily developers.
According to the National Multifamily Housing Council (NMHC) Construction Survey in September, 88% of respondents reported delays, holding steady with the prior quarter. Of those who reported delays, 79% cited delays in permitting and 79% noted start delays.
Conducted between Sept. 5 and 18, the NMHC quarterly survey found that of those experiencing delayed starts, the primary cause cited by 78% of respondents was the limited availability of financing, up from 62% in the prior quarter. This was followed by 74% of respondents reporting permitting, entitlement, and professional services and 61% citing economic infeasibility.
“Housing providers continue to navigate economic uncertainty and steep financing challenges caused by high interest rates, increasing insurance costs, skyrocketing state and local taxes, and a lack of confidence in overall conditions,” said NMHC president Sharon Wilson Géno.
One bright spot of the quarterly survey was the share of respondents who cited staffing as a cause of their delayed starts decreased to 4% from 10% in June. However, the labor market generated mixed responses. The share of respondents who reported that labor costs increased more than expected fell slightly from 18% to 15%, and those who thought they increased less than expected stayed flat at 18%.
Wilson Géno continued to called on lawmakers at every level to work with housing providers to enact solutions that lower the cost of housing and make it easier to create new supply.
“Broader housing equity and availability are the only real solutions to the housing crisis the nation faces,” she said.