The impact of the COVID-19 pandemic continues to resonate throughout the country, and has presented some unique challenges to the home building industry. Leaders in the multifamily segment shared their experiences navigating these challenges with YieldPro TV's Power Hitters series
, and how they see the industry moving forward.
"These are clearly probably some of the most challenging times that we've ever faced," Ed Easley, president of LMC Development at Lennar Multifamily Communities, told Linda Hoffman of YieldPro TV. "One of the things that's begun to stand out is that I think our home has taken on a whole different meaning now — whether it’s an apartment or whether it's a single-family residence. It's not only shelter, but it's now your gymnasium. It's your form of entertainment. It's a safe and healthy place for most people."
"I think everybody in our industry is really trying to figure out what is that going to mean going forward and what sort of changes are we going to need to make to continue to serve the needs of our residents and home owners," he added. "It's really going to force our industry to evolve in a lot of different ways."
That includes where homes may be built. The flight from the urban core in many areas as a result of COVID-19 has increased activity in the suburbs
. This trend was already on the rise, noted David Ward, executive vice president of development at MAA — a publicly traded real estate investment trust (REIT) — and chairman of NAHB’s Multifamily Leadership Board (MLB)
, in part because of affordability.
"The market seems deeper in the suburbs because you have more residents who can afford the price point, and the suburbs are generally larger than the urban area, with more submarkets," he added.
Increased telecommuting operations may continue to make suburban living more attractive in the long term, but affordability is likely to be an issue across the board, given the pause in construction that occurred in certain areas as a result of COVID-19 and the subsequent supply chain disruptions and skyrocketing material costs
"This is all COVID-related in one way or another," observed Kevin Kelly, chairman and managing principal of Leon N. Weiner & Associates and former NAHB chairman. "But the ripple effect through the supply chain really is a) disruptive, and b) is going to be very costly. Lumber
is a prime example of that."
Issues such as the eviction moratoria, including necessary relief to home owners and rental households
, are also hampering the industry, with potential long-term effects.
"I think the multifamily industry is doing a great job of coming together and trying to educate our lawmakers on these challenges — both the short-term impact to the industry and households and the long term," noted Lance Swank, president of The Sterling Group. "The long term is probably what the lawmakers don't get. And we don't want to set the country up for a greater deficit in housing, because right now, we don’t have enough housing period, let alone affordable."
Home builders have been actively working to increase supply as safely as possible, but as prices continue to increase and builders have difficulty securing additional supplies, such as appliances for multifamily units, production will have a hard time keeping up with demand.
"We have had a shortage of shelter and housing for a very long time," Easley stated. "I think the home builders and apartment developers are operating at a very high level right now, but we're not delivering enough product. And I don’t see that coming to an end."
Upcoming episodes of YieldPro TV's Power Hitters series will feature interviews with additional industry leaders, including Justin MacDonald of MacDonald Companies and Sean Caldwell of Mill Creek Residential Trust. All episodes are available at yieldpro.com