Just 12 per cent of the US population live in apartments, but recent research on this market shows that its impact on the economy is far more wide-reaching than envisaged. The pressure on supply from strong demand also makes apartments one of the most attractive US property options, particularly as buy-to-let investments.
A survey published by the National Multifamily Housing Council (NMHC) in conjunction with the National Apartment Association has revealed some interesting statistics. In 2013, US apartments and their residents contributed US$1.3 trillion to the national economy (the equivalent of US$3.5 billion a day). The 37 million apartment residents supported 12.3 million jobs.
Demand for apartments is expected to grow, particularly among the 77-million strong baby boomer generation and the Millennials who number almost 80 million. Recent research from Harvard University suggests that almost 5 million new rental households will have formed in the US in the decade to 2020.
“We need 300,000 to 400,000 new apartments each year just to keep up with resident demand and in 2013, we completed 186,000 units, only half of what was needed in that year alone,” said Daryl Carter, Chairman of NMHC, commenting on the survey results.
As well as national snapshot of the apartment market, the survey also focuses on individual states and their metro areas. It finds that 13 per cent of the Florida population live in apartment properties. The vast majority (46 per cent) of households are comprised of just one person with 2-person households accounting for 29 per cent of the total.
In Orlando, the report reveals that “three years of accelerated job growth has translated into a post-recession high for apartment demand”. This demand has been based mostly on tourism, a sector that has remained stable in Orlando and is now one of the main employment drivers in the metro area. The survey expects this high demand to continue as younger relocators – more likely to rent than buy property – are attracted to job opportunities. Some 330,700 people, 15 per cent of the total population, live in apartments in Orlando.
Tampa also featured in the survey, which discovered that new apartment construction in this metro area was high in 2014. 366,400 people – 13 per cent of the population – live in apartments in Tampa. This is expected to rise, however, as the survey reports that the Tampa metro area registered in 2014 the highest levels of new demand for years.