Multi-family properties have outpaced office and retail properties due to consistent demand, independent of economic trends. During periods of economic growth, household formations increase as more people are able to move into rental housing; in weak economies, people turn to rental housing for cost savings.
Although the supply of multi-family properties has increased in absolute numbers in recent years, the supply increase hasn’t addressed the sectors with the most pressing needs in the mid-to-lower income levels. The majority of properties under construction require prospective renters with an annual income of more than $75,000 and over half of them require an annual income of over $100,000. Given that close to 80% of renters earn less than $75,000, the current supply does not address the needs of the largest sector of renters.