COVID-19 Could Increase Demand for Multifamily Construction in Suburbs
In this editorial, we’ll discuss how the fallout from COVID-19 could intensify an ongoing demographic shift, leading to a dramatic increase in multifamily construction activity in lower density markets, such as smaller cities and suburbs. Before you bid on your next project, set yourself up for success by partnering with one of Cotney Attorneys & Consultants Law’s Miami construction lawyers.
Breaking Down the Data
A recent report by Moody’s Analytics highlighted how fallout from COVID-19 is likely to result in more and more people wanting to live in the suburbs instead of highly-dense metropolitan areas like New York City or Los Angeles. Adams Kanis, senior regional economist at Moody’s Analytics, reported that the upcoming generation of homebuyers and renters is likely to remember the impact of COVID-19 and seek out suburban lifestyles that aren’t dependent upon mass transit or crowded living situations — just a few of the key commonalities among the major metropolitan areas hit hardest by the spread of the virus.
That being said, it’s important to remember that this housing trend was already taking place. Even before the pandemic hit, we were seeing residential construction increase at higher rates at inner and outer suburbs than in high-density markets. Particularly, the strongest growth rate was found in outlying suburbs of small metropolitan areas. The combined shares of lower density markets, including core metro areas of small cities, is expected to continue to increase past its current rate of 47 percent of all single-family builds.
Construction Firms Are Taking Note
This trend is expected to lead to more construction in low- and medium-density markets as households veer further out from the urban cores of metropolitan areas. Only two of the ten U.S. cities with populations greater than one million experienced a growth rate higher than one percent. New York and Chicago both experienced a negative growth rate. What this means for contractors and condo developers alike is that apartment rentals and luxury condo purchases will take a toll, not to mention the fact that many sellers were already keeping their properties off the market as cities faced COVID-19-related shutdowns.
Some developers, such as national builder Toll Brothers, plan to pause the development of any luxury condo properties in city centers. In Miami, developer The Related Group is backing away from a proposal to build a 34-story luxury condo tower on Miami Beach’s Terminal Island in favor of a 160,000-square-foot Class A office project. Presently, the most important thing you can do to protect your construction business is closely monitor trends, COVID-19-related protocols, and how the areas you work in are positioned to recover post-pandemic.
Partner With the Best of the Best
At Cotney Attorneys & Consultants, we understand the immense pressure the construction industry is under to move forward with recovery-based efforts following COVID-19. For any assistance with the bidding process, dispute resolution, liens, or contract review, reach out to a Miami construction lawyer with Cotney Attorneys & Consultants. We regularly represent everyone from contractors and subcontractors to engineers and developers and are well-versed in any legal concerns you may come across in this complex industry.
If you would like to speak with one of our Miami construction lawyers, please contact us today.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.