December 6, 2015
It seems like the United States has a definite need for more multifamily construction, yet the development of such projects has slowed down drastically. In both California and New York, the apartment demand has overtaken the supply.
The latter fact spurs the question of why no new construction is taking place in these locales, and there are many factors involved in the answer.
Since the recession, it has been very difficult to get a loan to finance multifamily projects. Also, there’s less land to build on in and around popular cities. According to reports, the largest reason is attributed to stricter zoning and land-use regulations.
Transaction loans appear to be easier to secure than construction financing in this cyclical environment. As more empty nesters and millennials migrate to downsized living situations, the demand for apartment living is sure to continue.