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Multifamily Construction Update (April 2020)

Construction-related issues begin to take hold as COVID-19 tears through the nation. Construction delays from the stay at home orders (affecting permits) and global supply-chain constraints led to the lowest 1Q20 deliveries in nearly a decade in New York City and a steep decline in nationwide multifamily starts.

Below are key takeaways from the following reports:

Multifamily Industry Reports Construction Delays Due to COVID-19 – Multifamily Executive Link

Multifamily and Single-Family Starts Take a Dive in March – RealPageLink

New York Deliveries Hit a Ten-Year Low – RealPageLink

Download the PDF version of this report here:

Multifamily Industry Reports Construction Delays Due to COVID-19

Multifamily Executive

  • More than half (55%) of the NMHC Construction Survey respondents reported experiencing construction delays
    • 76% related to permitting
    • 59% in delayed starts
    • 62% due to local/state moratoriums
    • 41% reporting labor constraints
    • 24% reporting a lack of materials
  • 73% of respondents implementing new strategies, including sourcing from different locations, staggering work shifts and using technology to reduce in-person interactions

Multifamily and Single-Family Starts Take a Dive in March

RealPage

  • Multifamily and single-family housing starts took a steep dive in March, as the COVID-19 pandemic deflated the U.S. economy
    • Multifamily starts fell to 347,000 units in March, a decline of 32% from February and down 3.9% Y/Y
  • Multifamily permits continued to tick upwards, likely due to permits filed earlier in the month (pre-COVID)
    • Some areas didn’t issue Stay-at-Home orders until late March. Based on March data, all of last month’s top 10 multifamily permitting metros remained the same (in order):
      • New York
      • Houston
      • Dallas
      • Austin
      • Seattle
      • Los Angeles
      • Washington
      • Phoenix
      • Minneapolis
      • Chicago

New York Deliveries Hit Ten-Year Low

RealPage

  • 1Q20 deliveries lowest in nearly a decade, with just 1,216 units completed
    • Follows decreasing Q/Q completion volumes since 3Q18
  • Deliveries anticipated at even more restrained levels, as Governor Andrew Cuomo ordered the shutdown of all non-essential construction activity in March
    • Only allowed construction necessary for health and safety of New Yorkers