Summary:
Increasing the supply of multifamily housing is a key strategy to reduce the cost of shelter in our larger cities. However, the time required to produce these units has grown over time. We document the duration from when an apartment or condominium development or redevelopment (i.e., conversion from another use) is first announced until its completion. We break down this duration into (a) the planning and permitting phase and (b) the construction phase. We find that, on average, projects spend three to four months more in the planning stage than in construction. This project duration is longer in the Northeast and the West, compared to the Midwest and the South, and it is cyclical over time, declining during extended periods of market weakness. Mixed-use projects and conversions tend to take longer to plan and build than multifamily-only projects and new construction. Finally, there is very little difference in development time between projects with public versus private funding.
Key findings:
- It takes longer to plan and permit new multifamily housing than it does to construct.
- Development time is cyclical with the building cycle suggesting that congestion in local planning offices or building suppliers may prolong project completion.
- Converting an existing building to housing actually takes longer than building a new structure.
Center Affiliation: Center for Housing and Policy
JEL classification: R31, H57
Key words: multifamily housing, residential real estate, planning, construction, project duration, geographic variation
https://doi.org/10.29338/ph2024-04
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