Key Highlights

  • 33% of multifamily building moving to low-density markets in suburbs and exurbs, according to National Association of Home Builders
  • Units for 50-plus tenants declining while single-family rentals increasing

Tenants Want Low-Density Rental Options

Just like homebuyers, tenants want out of high-density urban areas. Homebuilders are paying attention.

According to the National Association of Home Builders (NAHB), approximately one-third of multi-family building has moved to the suburbs and exurbs.

Window of Opportunity Now for 2 – 4 Unit Buildings

Robert Dietz, chief economist with the NAHB, said there is an uptick in demand for single-family build-to-rent housing.  This build-to-rent market now represents a market share of 4% within single-family starts.  Dietz predicts this market share to increase to 5% – 6% over the coming two to three years.

Dietz said, “There’s a window of opportunity for gains there.  You do have people who want single-family structures rather than a high-rise, but they don’t have a down payment saved to own yet.”

Dietz is also predicting that the currently languid townhouse market will soon wake up from its current negligible market share to 11% to 15% over the next couple of years.  He sees townhomes as medium-density housing solutions that offer middle-class prospects lower-cost housing options.

Multi-Family Design Trends for 2021

Daniel Gehman with Danielian Associates and Walter Hughes with Humphreys & Partners Architects suggested the following multi-family design and architecture trends for 2021:

  • More technology to enable decreased touch points in both units and common spaces, streamlining lease processes, VR and virtual tours to expedite leasing and robots to deliver packages and groceries
  • Home offices within floor plans
  • Fusing indoor and outdoor spaces, improved ventilation systems and pods for smaller-sized gatherings (6 to 8 people) rather than expansive clubhouses to accommodate big gatherings
  • Greater eco-friendly and sustainable materials for greater solar use, water-saving features, cleaner air and recycling-compost programs

Top 10 Markets for Multi-Family Permit Growth

  1. Jackson MS
  2. Mankato-North Mankato MN
  3. Vernon-Anacortes WA
  4. Abilene TX
  5. Yuma AZ
  6. Beaumont-Port Arthur TX
  7. Dubuque IO
  8. Topeka KS
  9. Columbia MO
  10. Brownsville-Harlingen TX


Thanks to National Association of Home Builders and REALTOR® Magazine.

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