The reason behind the boom in residential tower construction in America

In a significant change of trend in residential construction, USA Construction of high-rise apartment towers is booming with increasing number of units.

According to information provided by real estate data firm Yardi, a Wall Street Journal (WSJ)Between 2021 and 2023, more than 2,900 buildings with more than 200 housing units have been added in the country, an increase of 17% compared to the period from 2018 to 2020, highlighting a clear preference for large-scale projects.

This push up It is a direct response to economic factors, such as rising construction costs and other related costs, which force developers to increase the number of units per building to ensure the profitability of their projects. This was reflected in 6% reduction in average size New apartments between 2013 and 2022.

Additionally, limited land available in urban centers forces builders to choose to erect tall towers on smaller lots, as noted. Ben BrewerManaging Director of Hines in the office of Dallas-Fort WorthWhere the lack of plots of about 1.6 hectares led to the construction of projects like residential towers VictorOne of the most in the Dallas With 40 floors.

Broad development strategy Multifamily complex Also connected with The current housing market environmentcharacterized by constant demand due to Record sale prices, limited inventory of houses for sale and High mortgage interest rates. These factors are extending the investment of relatively high income earners in the rental market.

Despite the slowdown in rent growth in most parts of the country, occupancy rates in urban apartments remain at what are considered high levels in most cities.

Focusing on larger complexes allows us to offer a wider range of amenities, viz WSJ, Rick Barrett, whose Milwaukee tower, The Couture, has 322 units and 46 floors, with a crescent-shaped outdoor pool and views of Lake Michigan, plus 10,000 square feet of shared space that includes a gym, lounge and dog park. According to Barrett, “When you have large-scale projects, you can have more facilities. And when you have more facilities, you win the convenience war.

Developers also face Regulatory changes which favors this new direction in construction. Cities like Austin, TexasRemoved prerequisites such as parking minimums for new developments, representing significant savings on construction costs.

For their part, Portland, Oregon, Minneapolis and San Jose, California have implemented similar changes by adapting their zoning codes and building regulations to facilitate the development of large multi-family projects. This marked a significant change in approach to urban construction, distancing itself from the 2008 real estate crisis and favoring rental projects over condominiums, which were seen as financially riskier and more complex.