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How Long Does It Take to Build Multifamily Housing?

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Abstract

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.

Suggested Citation

  • Chris Cunningham & Anthony W. Orlando, 2024. "How Long Does It Take to Build Multifamily Housing?," Policy Hub, Federal Reserve Bank of Atlanta, vol. 2024(4), June.
    • Handle: RePEc:fip:a00068:99100
    DOI: 10.29338/ph2024-04
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    References listed on IDEAS

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    1. Gyourko, Joseph & Hartley, Jonathan S. & Krimmel, Jacob, 2021. "The local residential land use regulatory environment across U.S. housing markets: Evidence from a new Wharton index," Journal of Urban Economics, Elsevier, vol. 124(C).
    2. Alessandra Del Boca & Marzio Galeotti & Charles P. Himmelberg & Paola Rota, 2008. "Investment and Time to Plan and Build: A Comparison of Structures vs. Equipment in A Panel of Italian Firms," Journal of the European Economic Association, MIT Press, vol. 6(4), pages 864-889, June.
    3. Lawrence J. Christiano & Richard M. Todd, 1996. "Time to plan and aggregate fluctuations," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 20(Win), pages 14-27.
    4. Michael D. Eriksen & Anthony W. Orlando, 2022. "Returns to Scale in Residential Construction: The Marginal Impact of Building Height," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 50(2), pages 534-564, June.
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    More about this item

    Keywords

    multifamily housing; residential real estate; planning; construction; project duration; geographic variation;
    All these keywords.

    JEL classification:

    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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