Multifamily development had an exceptional year in 2021, with more than 350,000 units delivered nationally. The volume was boosted in part by the projects initially slated to come online in 2020 and delayed by the onset of the pandemic, but mainly by mobility and job recovery-induced demand. Lingering concerns about overbuilding have largely dissipated thanks to this significant increase in demand, as even though deliveries have been consistent over the past few years, the average occupancy rate in stabilized properties rose to near all-time highs, above 96 percent.
In the ranking below, we present the top 10 markets for deliveries in 2021 by the number of units, based on Yardi Matrix data. To get a clearer picture, we’ll be comparing their performance with data not just from 2020, but from 2019, too.
Combined, 146,483 units came online in these 10 metros, accounting for roughly 42 percent of the national volume. The figure is also above the 2020 and 2019 volumes recorded in these metros, when the number of units delivered amounted to 122,521 and 120,808 units.
|Rank||Metro||Units Delivered 2021||Percentage of Stock 2021||Units Delivered 2020||Percentage of Stock 2020||Units Delivered 2019||Percentage of Stock 2019||Occupancy November 2021|
Consistently among the leaders in rent growth, Phoenix made the list with a total of 10,058 units delivered in 2021 across 52 properties, or 2.9 percent of total stock. The volume of deliveries marked a new decade high in Phoenix, up from 9,143 units in 2020 and 9,351 units in 2019.
Strong in-migration from more expensive metros has encouraged developers to keep their focus on the high-income renter. An overwhelming 8,943 units were part of Lifestyle projects, while the Renter-by-Necessity segment expanded by 1,115 units, 677 of which were in fully affordable communities.
The occupancy rate in stabilized properties rose 30 basis points over a year, to 95.9 percent in November and in early 2022, developers had 35,945 units under construction, with top spots for development in the Western Suburbs, Gilbert and Sky Harbor.
Multifamily development reached a new high in 2021, with 10,692 units added to the inventory, a substantial 5.5 percent of total stock—which makes it a leader among major markets, by percentage of stock. Not only has last year’s volume surpassed totals of 2020 (6,151 units) and 2019 (8,401 units) but also that of the previous peak recorded in 2016 (9,785 units).
The market’s steady economic recovery sustained demand for Lifestyle units—9,356 units of last year’s deliveries were in the upscale segment. RBN units amounted to 1,104, 796 of which were in fully affordable properties.
Despite the robust inventory expansion, the occupancy rate rose 80 basis points in the 12 months ending in November, to 96.0 percent. Even through the pandemic pushed residents out of the urban core and into less dense areas, roughly a quarter of last year’s deliveries were in Charlotte’s inner-ring submarkets.
8. Los Angeles
Multifamily deliveries in Los Angeles totaled 10,883 units last year, 2.4 percent of total stock, reflecting a slight softening compared with 2020 when 11,369 units were added, but above the 9,774 units brought online in 2019. Completions have been uneven over the past decade, the average per year hovering around 8,700 units.
Although its economic recovery is lagging that of inland metros, L.A. is bouncing back at a steady pace and the occupancy rate advanced by a solid 180 basis points year-over-year through November, to 96.4 percent, which also signals increasing demand for rentals. Mirroring the national trend, last year’s deliveries largely favored the Lifestyle segment, with more than 80 percent of newly completed units in upscale communities.
Strong demographic expansion over the past decade has kept developers busy in Orlando, their activity culminating last year, when deliveries reached an all-time high of 12,948 units, 5.0 percent of stock. The figure is nearly double the 6,864 units delivered in 2020 and well above the 8,145 units brought online in 2019.
Orlando’s population gained more than half a million residents during the past decade and the pandemic sustained that migration pattern: Many relocated here attracted by a relatively affordable cost of life, but also the state’s lack of income taxes and short lockdown period. In turn, this has helped its local economy rebound quicker. Newly added units favored the renters looking for upscale apartments, and 12,391 units were in Lifestyle projects. Consequently, the RBN segment grew merely by 557 units, all in fully affordable communities.
Strong demand was reflected in the occupancy rate, too, which advanced 220 basis points in the 12 months ending in November, to 96.7 percent.
6. Washington, D.C.
The District’s inventory expansion has maintained a steady upward trend during the past three years, reaching 13,148 units in 2021, 2.3 percent of total stock, slightly above the 12,822 units delivered in 2020 and the 12,286 units of 2019. Still, it remained below the nearly 16,000 units delivered in 2016.
Demographic expansion posted an 11.4 percent increase during the past decade, spurring demand for rentals. Housing the federal government has helped the metro maintain a strong economic performance throughout the health crisis. Moreover, roughly 90 percent of last year’s deliveries targeted the high-income renter.
Even though urban areas were initially affected by the outflux of residents relocating to less densely populated areas, the occupancy rate rose 1.5 percent year-over-year through November, to 95.3 percent.
Atlanta’s multifamily inventory grew by 13,653 units in 2021, 2.9 percent of total stock, a new all-time high. Still, the metro’s inventory posted consistent gains in recent years: in 2020, 10,540 units delivered and 2019 ended with 12,649 units added to its housing stock.
This robust demand was bolstered by consistent population expansion, up 14.8 percent during the last decade, and steady economic recovery sustained by announced corporate expansions. Furthermore, roughly 60 percent of the new rental inventory was added to urban submarkets. Similar to the other markets, the bulk of completions (more than 12,000 units) targeted the high-income renter. Year-over-year through November, the occupancy rate rose 110 basis points, to 95.8 percent.
4. Austin, Texas
Austin has been one of the fastest growing metros in the country, its population marking a 32.9 percent expansion during the decade. Paired with the fact that in 2021 the metro ranked first among major metros in economic expansion, demand for housing was through the roof. The Lifestyle segment was favored, expanding by 13,080 units. The RBN segment grew by 1,287 units, 1,101 of which were in fully affordable communities.
The occupancy rate clocked in at 95.8 percent in November, following a 230-basis-point increase year-over-year, the highest rate hike among the markets in our ranking.
Miami’s apartment stock expanded by 16,221 units, the equivalent of 4.7 percent of total stock, a new decade high. The new record comes after two years of softened deliveries: 11,132 units in 2020 and 12,251 units in 2019.
Demand increased as Miami’s population bounced back in 2020, following a sharp decline in 2019. Just like in Orlando, Miami’s fortes—open economy and limited lockdown measures—proved highly attractive to residents and businesses alike.
Occupancy rose 220 basis points on a year-over-year basis through November, to 97.2 percent, which makes Miami’s rental market the tightest among the metros in our ranking.
Houston occupies a well-deserved second position with 19,878 units added to its stock in 2021. It has seen a gradual progression in deliveries since 2019 onward: 10,655 units brought online in 2019 and 14,403 units in 2020.
Boasting one of the youngest demographics in the U.S., Houston’s housing needs are ever so high. Occupancy advanced 190 basis points on a year-over-year basis through November, to 93.9 percent.
The occupancy rate in stabilized properties is another strong metric to showcase the robust demand for rentals in the Metroplex. The rate stood at 95.6 percent in November, up 190 basis points year-over-year. In addition, DFW gained more than 1.3 million residents over the past decade, a solid 20.4 percent growth rate.
Yardi Matrix covers all multifamily properties of 50-plus units across 140 markets in the United States. This ranking reflects completions within that sample group.
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