If its two new U.S. Congress seats are any indication, over the past 10 years Texas’ “business-friendly” economy has paid off — at least in terms of population growth. Accompanying that inrush of new residents has been a frenzy of multifamily construction activity aimed at housing them.
While supply hasn’t yet met demand, several Texas cities are in the top 10 nationwide when it comes to building new apartments, according to a StorageCafe report based on Yardi Matrix data. In the past decade, Houston built the most apartments of any large U.S. city. After a cameo by New York City in the No. 2 spot, Austin and Dallas took third and fourth place on the list. Seattle edged out San Antonio for the fifth spot. The Central Texas city was sixth, building 52,000 units over the past 10 years.
The “amenities arms race,” as the report puts it, is also hot in Texas. The study shows Houston built the most apartments classified as “luxury” by Yardi Matrix over the past 10 years, with 72,000. New York ranked second and Austin third on that scale. About 86 percent of the new apartments built in the U.S. in the past decade are classified as luxury dwellings, StorageCafe reported.
“I can only speak for Texas, but I believe Texas is behind the curve in new apartment construction,” said Texas A&M research economist Harold Hunt in the report. “I base that thought on a year-over-year increase in average apartment rents in Texas that is just under 20 percent. Permits and deliveries here in Texas have been fairly flat over the past several years, although Texas continues to be popular for out-of-state migrants. Currently, demand is far outstripping supply.”
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Nationwide, apartment construction is on an upward trend, StorageCafe reported, with more than 3.1 million new units completed over the past decade. The study pegs 2021 as the peak year of new apartment supply in the past decade. About 417,000 new units entered the market last year, up 12 percent from the previous year.
The numbers point to an accompanying rise in construction of self-storage space, as one in three people in the country use it, according to the report. About 44 million square feet were delivered in 2021, with an additional 50 million square feet expected in 2022.