During the 1970's it wasn't uncommon to find many multifamily rental properties in the United States. These included town homes, apartments and condos but in the 21st Century times have changed and there are fewer of these buildings out there than ever before.
One of the main factors that can be attributed to the decline in multifamily rentals in the United States is that most renters want to live in larger units which have amenities and features that they are familiar with from big city complexes. Other renters want to live in big apartment, condo or town home communities because they are typically closer to the city and this has left the construction of smaller units severely lagging.
What's Happening With Small Multifamily Construction?
In 2017 only 27,000 smaller multifamily buildings were constructed in the United States while 187,00 properties which contained 20 or more units were built. This number stands in contrast to the 288,000 smaller multifamily rentals that were built in 1972.
Much of the shift has to do with the rise of no-growth, not-in-my-backyard politics since the 1960s. This political movement has been strongest in homeowner-dominated suburbs, and as a result, as BuildZoom chief economist Issi Romem showed in a remarkable study earlier this year, almost all the housing construction in expensive, space-constrained coastal metropolitan areas such as Boston, Los Angeles, New York, San Francisco and Seattle is now happening in and around established urban centers. The residential suburbs of these areas have effectively gone dormant, shunting new construction to the neighborhoods — mostly in or near old urban cores — where the neighbors either don't object (because they're in commercial buildings) or don't have much political clout (because they're low-income renters), and local elected officials see benefits in a growing population. In such places, big apartment buildings generally make more sense than duplexes. Also, as barriers to new construction — land costs, labor costs, permitting costs, zoning rules, Nimby opposition, etc. — have risen, the threshold project size needed to turn a profit has increased even in less expensive metro areas.
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