The Annual Scorecard: Harvard Report Finds Multifamily Sector Booming but Affordability Crisis

3 min read

The multifamily housing sector is going strong in the United States but there’s still an affordability crisis for renters, according to a recent report by the Joint Center for Housing Studies of Harvard University.

As always, the Joint Center’s annual scorecard, The State of the Nation’s Housing: 2014, provides a wealth of statistics, information, and analysis on national housing characteristics and trends, including multifamily rents and vacancy rates, homeownership rates, housing supply, affordability, and the pace of new household formation.

In the area of multifamily housing, some of the report’s findings are that:


  • The share of all cost-burdened renters (those paying more than 30% of their income for housing) increased from 2001 to 2011, to just over 50%, but improved slightly in 2012. Meanwhile, 28% of all renters were severely cost-burdened, paying more than half of their income for housing.
  • Multifamily housing starts surged by 25% in 2013, topping 300,000 units for the first time since 2007 and just 13% below the peak year of 2005. The number of multifamily rental starts was the most since 1998. The overall rental housing supply increased, but most of the growth was from leased single-family homes.
  • Demand and supply of rental housing appear to be near balance, and multifamily property values increased by double digits for the fourth consecutive year in 2013.
  • Rental vacancy rates continued to fall while rents continued to rise. Nationally, the rental vacancy rate fell to 8.3% in 2013 – the lowest point since 2000 – while nominal rents rose by 2.8% nationally.
  • The number of renter households grew by more than 500,000 in 2013, well above the average annual growth of 400,000 of the past few decades. A variety of household types have shifted to
  • renting beyond those most apt to rent – younger adults; low-income households; and single persons. These others include many older households, higher-income earners, and families with children.


The report suggests a rosy future for multifamily housing: “Two broad trends will drive future growth in renters: the imminent surge in the number of older households and the increasing racial/ethnic diversity of younger age groups. Over the coming decade, the number of renters aged 65 and older is projected to rise by about 2.2 million and account for roughly half of all renter growth. The aging of the population also means that the share of renters that are single persons or married couples without children will soar. Meanwhile, Hispanics will account for slightly more than half of all new renters while other minorities will make up the remainder. Meeting this diverse demand will require a range of new rental options in a variety of community settings.”

The report notes that the single-family housing market is still facing some headwinds that suggest the homeownership rate may not rise for a while.