Gateway Markets Regain Development Momentum
Whether you call them “gateway” markets or the “sexy six,” the primary coastal hubs that traditionally attract the majority of domestic and international capital are well represented among the top markets for annual multifamily permitting in September’s data release from the U.S. Census Bureau, and in most cases are dramatically increasing their permitting activity.
New York continues to lead the nation for multifamily permitting with 37,691 units permitted in the year-ending September, an increase of more than 13,000 units from last year or a jump of 52.7%. Los Angeles again ranked #2 with about 18,000 units permitted, almost doubling their annual total from one year ago.
Washington, DC remained among the top permitting markets at #5 in September, increasing their annual permitting by 47.4% or about 3,900 units, while Seattle slipped to #11 this month but still increased their multifamily permitting total by 36.7% or roughly 2,400 units.
Rounding out the “sexy six,” Boston ranked #16 among Realpage’s top 150 markets with a 44.7% annual increase (+2,303 units) to 7,460 units, while the Bay Area markets of San Jose, Oakland and San Francisco ranked well down the list individually but would have ranked #7 with a combined total of 11,543 units permitted, up 46.8% from last year (+5,407 units).
Conversely, among the secondary high-growth markets, development activity has stalled or fallen back as top 10 markets Phoenix and Atlanta permitted close to the same amount as last year, while Dallas, Houston, Austin and Miami decreased their permitted unit counts by a combined 11,004 units. Only Raleigh/Durham saw a significant increase in multifamily permitting (+3,153 units) among the non-gateway top 10 markets.
Despite declining permitting in four of September’s top 10 markets, their combined total of 148,456 units was up 14.5% from last September for an increase of 18,765 units. Compared to August, the top 10 markets’ annual permitting total was little changed (-0.7%).
In addition to the expanding top 10 and the gateway markets mentioned, other markets with significant increases in annual units permitted in September were Kansas City (+2,187 units), West Palm Beach (+1,932 units), College Station-Bryan, TX (+1,762 units), Tacoma (+1,712 units) and Fort Worth (+1,672 units).
Orlando (-4,572 units) led for annual permitting decreases, followed by Dallas and Houston. Significant decreases occurred in Columbus, OH (-2,911 units), Riverside-San Bernardino (-2,162 units), San Diego (-2,100 units) and Lakeland-Winter Haven, FL (-1,995 units).
Permitting by Place
Below the metro level, eight of August’s top 10 permit-issuing places returned to this month’s list with the first five remaining in order. The list of top individual permitting places (cities, towns, boroughs, and unincorporated counties) generally includes the principal city of some of the most active metro areas.
The city of Los Angeles again led the nation for multifamily permitting at the local level with New York’s three most active boroughs returning among the top five. The city of Phoenix also placed in the top five while the city of Fort Worth jumped to #6 in September from #10 last month. The cities of Austin and Atlanta each slipped one spot as the cities of Columbus and Houston fell out of the top 10 entirely. The cities of Miami and Denver joined the top 10 list this month, permitting about 5,500 units apiece.
Among the top 10 metros for multifamily permitting, Dallas, Houston, Washington, DC and Raleigh/Durham were not represented on the top 10 list of permitting places, although the core cities of Dallas, Houston, Raleigh and Durham were among the top 20 places. Washington, DC’s multifamily permitting was spread diversely around that metro’s area.
