Dive Brief
- The time to build an apartment building increased by 0.1 month, or roughly 3.5 days, to 19.9 months in 2023, according to the National Association of Home Builders’ recently released analysis of the 2023 Survey of Construction from the Census Bureau.
- The relatively minor increase in permit-to-completion time in 2023 was a dramatic improvement compared to the increase of 2.3 months in 2022.
- In the West region, authorization to completion took 20.9 months, while it was 20.8 months in the Northeast. The South followed at 19.5 months, while the time to build only took 17.3 months in the Midwest.
Dive Insight:
Not surprisingly, the size of the building plays a major role in the time to complete a project. Properties with 20 or more units took 22 months to complete after getting authorization in 2023. Those with 10 to 19 units needed 21.5 months, while five-to-nine-unit buildings required 16.9 months. Interestingly, buildings with two to four units required more time, 18.7 months, than those with five to nine units.
Compared with development times before the pandemic, only five-to-nine-unit buildings took a similar time to complete. In 2019, the permit-to-build time for buildings with two to four units took 3.3 fewer months to complete. Ten-to-19 unit projects took 2.8 fewer months, while 20 or more unit projects required three fewer months.
“That could be a scale effect related to smaller builders constructing those types of units, and there were supply-chain issues, but there’s no hard data to prove that,” Robert Dietz, chief economist for the NAHB, told Multifamily Dive.
After COVID-19 hit the U.S. in 2020, the construction industry was plagued by supply chain issues and materials shortages for several years.
Even though the number of starts fell in 2024, Dietz said it was hard to predict whether permit-to-completion times would fall.
“Frankly, the 2024 data are going to be affected by tight financing conditions and the broader slowdown,” he said.
Click here to sign up to receive multifamily and apartment news like this article in your inbox every weekday.