Data from the 2020 Census Bureau’s Survey of Construction (SOC) show that total multifamily units completed in 2020 increased by six percent to 375,000, the largest annual count of multifamily units completed in thirty years. The number of multifamily units completed were divided between 348,000 units built for-rent and 28,000 units built for-sale, increasing in both categories from the prior year.
The 2020 results are counterintuitive given that it was the year in which COVID-19 pandemic resulted in a dramatic drop in the related Multifamily Production Index (MPI). However, unlike the MPI, which is partly based on multifamily starts, the SOC data track the construction completed on units that were started at least one year prior. A prior post shows that the time required for an apartment building to be completed (i.e., the “Start to Completion” time) in 2020 took at least one-and-a-half years, with completion time increasing proportionally to the number of units in the apartment.
The SOC differentiates between a “building” and a “unit”, with “unit” defined as an apartment, a group of rooms, or a single room intended for occupancy as separate living quarters. The number of buildings completed in 2020 was 14,000. Fifteen years ago, in 2005, a total of 29,000 multifamily buildings were completed. The 2020 building completion total represents a downward decline from earlier years.
The number of multifamily units completed in buildings with 9 or fewer units and 10 to 29 units increased in both percentage and numerical terms in 2020. However, fifty-five percent of the multifamily units completed in 2020 belonged to buildings with 50 or more units. It is worth noting, however, that the market share gains for 50+ unit production appears to have ended in 2018. NAHB HBGI data show multifamily construction expanded in lower density areas recently, which will continue this trend.
In terms of regional distributions, 75 percent of multifamily units were built in the South and the West.
The above figure breaks down multifamily unit completions in 2019 and 2020 between the built for-sale and built for-rent market by Census Region. Built-for-rent multifamily experienced growth in all regions except the Northeast, which experienced more construction shutdowns due to the COVID crisis.