O
ne of the hallmarks of the
current development boom
has been the degree to
which it has been focused
almost exclusively on high-
end apartments. Proponents say it
represents a change in our housing
preferences, with more and more
higher-income households choosing
to rent amenity-rich apartments.
Critics point out that the nation is
facing a near crisis-level shortage
of affordable housing, yet the only
properties being built are pricey
Class A+ or luxury ones.
The apartment boom also has got-
ten more media
attention this
cycle than in the
past. The home-
ownership count
continues to edge
downward, millen-
nials are flooding
into cities looking
for the hip urban
lifestyle, and baby
boomers are down-
sizing and choosing
to rent. Given the
media headlines, it
can be tempting to
make this trend toward higher-cost,
higher-rent infill construction seem
like a new phenomenon. But it’s not.
Conventional wisdom has long been
that the only new developments
that pencil in most areas are either
high-end or low-income housing tax
credit properties.
But old trend or new, a common
worry is whether the industry is
in danger of overbuilding the high
end of the market. At the National
Multifamily Housing Council, we
heard this same refrain a year ago,
two years ago, even three years ago
in some markets. Yet, in most cases,
demand has held up better than
many expected, resulting in good
absorption of the new supply of
higher-end units.
Consider that in Denver, we have
added nearly 30,000 new units over
the past four years and are expected
to add another nearly 12,000 in 2017.
It’s fair to ask whether this can con-
tinue. After all, how many people
can afford to rent these units? Mark
Obrinsky, NMHC chief economist,
recently looked at large, public
microdata sets to see if we can get
Adrian Tiemens Photography
Denver’s Broadstone on 9th was completed in 2016, features 324 units, has a 92 percent occupancy rate and is considered a high-end apartment community.
Please see Page 31 How deep is the demand for high-end apartments?INSIDE
Agencies are playing an important role in the fight to preserve workforce housing. GSE spotlight PAGE 8 The latest fitness facility trends include must-haves for amenitized properties. Amenity trends PAGE 30 Castle Rock is bullish on multifamily develop- ment with several new downtown projects. Community highlight PAGE 20 May 2017Kim Duty
Senior vice
president, public
affairs, National
Multifamily
Housing Council,
Denver