2023-11-01 20:00:06
The Midwest & West are investing far more in multi-family housing than in the past
Source: Construction Coverage analysis of U.S. Census Bureau American Community Survey and Building Permits Survey data | Image Credit: Construction Coverage
Multi-family housing plays a crucial role in bolstering housing availability in states with substantial urban populations. Nationally, approximately 28% of the current housing stock falls under the multi-family category, although this figure exhibits significant regional disparities. New York State leads the pack with the highest proportion of existing homes classified as multi-family, standing at 52.5%, followed by Massachusetts (43.1%), Rhode Island (38.6%), Hawaii (36.4%), and New Jersey (36.0%). Conversely, states in the South, Midwest, and Mountain West, which tend to be more rural, have traditionally allocated fewer resources to medium- and high-density housing. For instance, in West Virginia, Idaho, and Mississippi, less than 17% of the existing housing stock comprises multi-family units.
When considering new housing units authorized in 2022, a few notable trends emerge. To start, states with already substantial levels of multi-family housing, such as New York, Massachusetts, and New Jersey, saw a significant uptick in authorizations during this period. In these three states, the proportion of authorized multi-family units surpassed 60% of the total, with New York leading at nearly 74%. Furthermore, in all but nine states, the percentage of new housing units categorized as multi-family exceeded that of the existing housing stock.
Perhaps most interesting, there has been a compelling surge in multi-family home construction in unexpected regions. Areas in the Midwest and West, traditionally characterized by average or below-average concentrations of multi-family housing, have now ascended to the forefront in terms of the proportion of newly authorized multi-family units. This includes states like South Dakota, Washington, Minnesota, Nebraska, Colorado, and Montana, all of which now exceed the 50% mark.
Similar patterns emerge at the local level, where a blend of densely populated coastal cities and focal points in the Midwest and Western United States show the highest rates of multi-family development. There are a few exceptions in Florida, Texas, and Georgia, but generally, cities in the South report the lowest rates of new multi-family housing. This is likely attributed to lower demand and lower home prices compared to other regions of the country.
Below is a complete breakdown of new multi-family housing development across all major U.S. metropolitan areas and all 50 states. The analysis was conducted by researchers at Construction Coveragea construction software and insurance company, using data from the U.S. Census Bureau. Refer to the detailed methodology section for more information.
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