Which Apartment Markets Have the Most Planned Units?

New York City, Houston, Dallas, Seattle and Washington, DC are among the leaders for apartment development activity during the current cycle. They have consistently topped the charts for completion volumes in recent years and posted some of the largest construction volumes at the end of 3rd quarter 2017. However, that trend could be changing. The volume of planned units in many of the cycle’s development leaders indicate construction activity in those metros could ease over the next year.

Metros like Dallas, New York City and Seattle have among the largest pipelines in the nation, but are not the metros with the most planned units. In fact, many of the nation’s largest markets – those with 400,000 or more existing units – have fewer than 10,000 units in the planning stage. The exception is Washington, DC, where nearly 24,000 units are planned, the most of any U.S. metro.

Meanwhile, a handful of metros, including San Francisco, Oakland, Columbus, Fort Lauderdale, West Palm Beach and Cleveland, have more planned units than what is currently under construction. Oakland, for example, had roughly 6,200 units under construction at the end of 3rd quarter 2017. However, the number of planned units is more than double that volume (12,500 units). That planned property volume places Oakland as the second-busiest market for new development over the next year. Also among the five metros with the most planned units are San Francisco (12,100 units), Miami (11,700 units) and Los Angeles (10,200 units).

A unit is considered planned once its project plan is approved by local regulators, and it is scheduled to start begin construction within a year. Not all planned units actually begin construction, though that rate varies by metro.

Nationally, construction periods for apartment projects vary based on size and type. For a garden-style project with fewer than 100 units, the average construction period lasts roughly 14 months from dirt work to completion. For a high-rise tower of 400 or more units, construction lasts roughly 30 months, on average.

Meanwhile, Dallas, the national leader for units under construction, has relatively few planned units. The metro has roughly 39,400 units under construction, but only about 6,300 units in the planning stage. New York City and Atlanta, with current construction pipelines at roughly 35,600 and 24,300, respectively, are also seeing relatively few planned units, both around 8,650 units. Similarly, Seattle and Houston have worked through much of their development pipeline over the past few quarters. The two metros each have less than 4,000 planned units as of 3rd quarter 2017.

By comparison, the top 50 metros combined for around 506,000 units under construction at the end of 3rd quarter 2017. Those same metros recorded around 229,000 planned units at the same time.