2008-08-19, 15:08

EXPLOSIVE POPULATION GROWTH CERTAIN TO AFFECT MULTIFAMILY INDUSTRY

By: Multifamily Real Estate Industry Team
The U.S. Census Bureau recently released projections that the U.S. population will rise from just over 300 million today to 439 million by 2050. The effect is akin to adding 17 additional New York Cities. It has been estimated that in addition to the 36,000 new schools and transportation infrastructure necessary to handle a projected 106 million more passenger vehicles, there will need to be at least 52 million new housing units.

Unless trends reverse dramatically, most of those additional 135 million souls will live in the nation’s metropolitan areas. This is not only because America’s rural areas will continue face stagnant or declining populations due to lack of job opportunities.….as of 2042, the Census Bureau estimates that for the first time in U.S. history, whites will be in the minority. The Census Bureau has concluded that by then the non-white Hispanic population will reach 133 million and the African-American population, 66 million. These and other minority groups and immigrants have historically clustered in and around urban areas, and there is no indication that this paradigm will shift dramatically anytime soon.

Given such demographic trends, along with increasing fuel costs, stifling traffic congestion and tighter restrictions on developing open spaces, much of the needed 52 million new housing units will be located around public transportation hubs and/or near employment clusters. It is simply not conceivable that most or all of the necessary housing could take the form of single-family homes surrounded by spacious lawns or in bucolic country cottages. Instead, most of the housing will take the form of multifamily communities---condominiums, apartments and densely arranged townhomes.

Even if the market seems rather unpredictable at the moment, the multifamily industry has many good reasons---about 52 million of them---to be optimistic about its long-term prospects.

(This entry posted by Mark Polston, a member of Womble Carlyle's Real Estate Development group)

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