Apartment building hit a 50-year high in 2022, according to analysts at Yardi Matrix. New housing is often marketed as “luxury” to justify prices set for high-wage earners, particularly in U.S. cities with strong job markets. Despite a recession, it is expected that more than 400,000 units will be completed in 2023, according to Yardi Matrix analysts. The majority of this new stock is aimed at upper-class customers, according to experts.
Deputy assistant secretary at the Department of Housing and Urban Development Ethan Handelman says that new housing is positioned as a luxury because of its newness. Providing additional capital and/or rental assistance to make affordable housing affordable for those who need it most is crucial when it comes to affordable housing.
It is not uncommon for new apartments to have rents exceeding a thousand dollars a month at market rate. Many high-wage earners in cities can afford this. The sky-high prices, however, seem out of reach for moderate-income Americans.The majority of people cannot be housed in the marketplace. Organizing Neighborhood Equity DC resource organizer Dominic Moulden said: “We need to admit that.”There is a lot of regulation in the housing sector in the U.S., which is contributing to the high cost of housing. Because of restrictive zoning codes, many U.S. cities lack land.
According to Sharon Wilson Géno, president of the National Multifamily Housing Council, regulation currently accounts for 40% of the cost of multifamily development. If we want to build more housing, we need to address that issue.”
Housing supply is expected to be shored up within five years under the Biden administration’s action plan announced in 2022. Despite these efforts, prices may not be significantly affected for some time.According to Al Otero, a portfolio manager at Armada ETF Advisors, rents won’t go down much in the next one to two years. Those more affordable price points do not allow developers to make a profit. In other words, we see new construction and development in the middle of the spectrum, but at the high end of it.”
