ORLANDO, FL - "The news of our death is greatly exaggerated," Steve Patterson, a builder of apartment housing, just told a news conference at the International Builders Show here. But multifamily developers have slowed down the pace of construction as the market burns off excess inventory of for-rent and for-sale properties. Construction of buildings with five or more units was down about 6 percent in 2007 from the year earlier, at 275,700 units. The National Association of Home Builders predicts that 250,000 multifamily units will be started in 2008, with about 260,000 in 2009.
Speaking right now, Larry Swank, head of the Sterling Group in Mishawaka, Ind., says that despite the slower housing market, multifamily developers are struggling to "make the numbers" work on rental apartments that are affordable to working families, including teachers, police and service workers. There is a strong need for affordable rental housing; he says government relief is needed to make the industry reasonably profitable. "The current administration has not been inclined to help the affordable housing arena," Swank said. "Next year, there could be positive changes" after the election.
Swank said owners and developers of apartments that are subsidized by government housing programs are facing sharply rising operating costs from utilities and other fixed expenses that are threatening both their existing properties and their ability to build new units. "There is still an affordable housing crisis in this country," Swank said. "The slower housing market has not changed that."
Source: Herald Tribune