{"id":184593,"date":"2025-09-05T13:20:44","date_gmt":"2025-09-05T19:20:44","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=184593"},"modified":"2025-09-05T13:21:10","modified_gmt":"2025-09-05T19:21:10","slug":"florida-and-texas-will-account-for-30-percent-of-new-apartment-units-coming-online-this-year","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/florida-and-texas-will-account-for-30-percent-of-new-apartment-units-coming-online-this-year","title":{"rendered":"Florida and Texas Will Build 30% of New Multifamily Units This Year\u2014Here&#8217;s What It Means For Investors In These Markets"},"content":{"rendered":"\n<p><span data-preserver-spaces=\"true\">By the end of 2025, over 500,000 newly constructed rental apartments are expected to hit the U.S. market, significantly increasing inventory and helping to alleviate the housing shortage, according to <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.rentcafe.com\/blog\/rental-market\/market-snapshots\/new-apartment-construction\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">a new report from RentCaf\u00e9<\/span><\/a><span data-preserver-spaces=\"true\">. This surge in supply could have significant implications for landlords nationwide.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">The latest figures follow<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/stateline.org\/2025\/05\/01\/the-number-of-new-apartments-is-at-a-50-year-high-but-states-expect-a-slowdown\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"> 2024&#8217;s nearly 600,000 new apartments<\/span><\/a><span data-preserver-spaces=\"true\">, the <\/span><span data-preserver-spaces=\"true\">largest<\/span><span data-preserver-spaces=\"true\"> number of newly constructed rental units since 1974, which temporarily lowered rents and increased vacancy rates before absorption took effect. However, the threat of <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/rookie-565\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">tariffs and increased construction costs<\/span><\/a><span data-preserver-spaces=\"true\"> could impact future building projects.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Similar to 2024, the Sunbelt is leading the building boom, responsible for 52.5% of new inventory. Despite recent reports of overbuilding and vacant units, Texas (81,407 units) and Florida (62,184 units) will cumulatively contribute to approximately 30% of that amount.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Metro-Level Leaders<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">New York City remains<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.globest.com\/2025\/08\/21\/new-york-leads-in-apartment-development-ahead-of-dallas-and-austin\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"> the top U.S. metro for new apartment completions<\/span><\/a><span data-preserver-spaces=\"true\"> for the fourth consecutive year, with 30,023 units expected to be online by the end of 2025, despite an 8.4% drop compared to the previous year. The Big Apple building bonanza has been fueled partly by<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/cbcny.org\/building-crisis\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"> zoning changes and tax incentives<\/span><\/a><span data-preserver-spaces=\"true\"> designed to make housing more affordable and stop outward migration.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">However, New York has been an outlier due to its economic importance and ability to sustain residents with jobs. <\/span><span data-preserver-spaces=\"true\">Overall, Texas <\/span><span data-preserver-spaces=\"true\">dominates cities with<\/span><span data-preserver-spaces=\"true\"> the <\/span><span data-preserver-spaces=\"true\">largest<\/span><span data-preserver-spaces=\"true\"> number of new apartment buildings.<\/span><span data-preserver-spaces=\"true\"> A generally business-friendly environment, a booming population, plenty of available land, and a typically low cost of living are fueling new construction of both apartments and<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.dwell.com\/article\/whats-driving-the-home-building-boom-in-texas-17728c20#:~:text=Population%20growth%20and%20construction%20workforce,Texas%20(around%20337,000%20total).\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"> single-family homes<\/span><\/a><span data-preserver-spaces=\"true\">.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Here\u2019s a look at some hot areas:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><span data-preserver-spaces=\"true\">Dallas-Fort Worth:<\/span><\/strong><span data-preserver-spaces=\"true\"> 28,958 new units are coming to Dallas, ranking it<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/dallas.culturemap.com\/news\/real-estate\/dfw-highest-apartment-construction-2025\/#:~:text=Dallas-Fort%20Worth%20ranks%20No,new%20apartments%20built%20in%202025&amp;text=A%20new%20apartment%20construction%20analysis,only%20by%20New%20York%20City.\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"> second nationwide<\/span><\/a><span data-preserver-spaces=\"true\">.\u00a0<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Austin metro: <\/span><\/strong><span data-preserver-spaces=\"true\">26,715 new units in the Texas tech capital ranks it third in the country. Despite an upturn in vacant apartments last year, the city of Austin is on track to add 15,000 new apartments in 2025,<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/austin.culturemap.com\/news\/city-life\/austin-most-apartment-construction-2025\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"> outpacing New York City<\/span><\/a><span data-preserver-spaces=\"true\"> for city-specific completions.\u00a0<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">San Antonio metro and surrounding hill country:<\/span><\/strong><span data-preserver-spaces=\"true\"> When San Antonio&#8217;s 8,070 new units are added to the 5,921 in the city proper, as well as new development in New Braunfels (946 units) and Seguin (400 units), the overall metro jumps to third place.<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Houston: <\/span><\/strong><span data-preserver-spaces=\"true\">Despite a statewide boom, Houston is heading in the opposite direction, delivering 14,439 apartments in 2025, a 37.6% decrease from the previous year. The reason is recent oversupply. The slowdown could be a boon to landlords, who have seen<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.houstonchronicle.com\/business\/real-estate\/article\/houston-apartment-market-2025-21025355.php\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"> rents stagnate amid the construction frenzy<\/span><\/a><span data-preserver-spaces=\"true\"> of the last few years.\u00a0<\/span><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Tariffs, a Construction Slowdown, and Rent Increases<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">The subject of tariffs is uncertain following a recent federal court decision ruling them unlawful and President Donald Trump&#8217;s move to <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.nytimes.com\/2025\/09\/03\/us\/politics\/trump-supreme-court-tariffs.html\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">take the issue to the Supreme Court<\/span><\/a><span data-preserver-spaces=\"true\">. The possible ramifications could have a profound impact on the construction industry and rental growth.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Should the tariffs prevail, construction costs will increase, and the deluge of new buildings will slow down, potentially leading to higher rents,<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.wsj.com\/economy\/housing\/apartment-developers-who-overbuilt-luck-out-with-tariffs-2ac8f6c3\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"> especially in the Sun Belt<\/span><\/a><span data-preserver-spaces=\"true\"> and beyond.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Should the<\/span><span data-preserver-spaces=\"true\"> tariffs increase inflation and interest rate cuts <\/span><span data-preserver-spaces=\"true\">be<\/span><span data-preserver-spaces=\"true\"> put on hold<\/span><span data-preserver-spaces=\"true\">, with<\/span><span data-preserver-spaces=\"true\"> high mortgage rates <\/span><span data-preserver-spaces=\"true\">keeping<\/span><span data-preserver-spaces=\"true\"> renters from buying, it will further increase rental demand and drive up prices.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Because of this, the Sunbelt&#8217;s bet on robust building this year <\/span><span data-preserver-spaces=\"true\">appears to be<\/span><span data-preserver-spaces=\"true\"> prescient.<\/span><span data-preserver-spaces=\"true\"> Vacancy rates are down, absorption is at its strongest level since 1985, and rent growth is poised to turn positive by the end of the year.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">&#8220;The relationship is going <\/span><span data-preserver-spaces=\"true\">to very quickly flip from a renter-friendly environment to a landlord-friendly environment<\/span><span data-preserver-spaces=\"true\">,&#8221; Lee Everett, head of research and strategy at multifamily giant Cortland, told the<\/span> <em><a class=\"editor-rtfLink\" href=\"https:\/\/www.wsj.com\/real-estate\/rent-price-increase-landlord-friendly-market-8ec25de5\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Wall Street Journal<\/span><\/a> <\/em><span data-preserver-spaces=\"true\">at the top of the year.&nbsp;&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Policy and Zoning: New Rochelle\u2014A Case Study<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">The housing crisis has led to an unprecedented building boom in New York&#8217;s tristate area. New Rochelle, a New York suburb, added 4,500 new housing units over the last decade, with a further 6,500 in the pipeline, an increase of 37% from 10 years ago. <\/span><span data-preserver-spaces=\"true\">This<\/span><span data-preserver-spaces=\"true\"> caused median rents to slow in growth, increasing just 1.6% since 2020 and declining from 2020 to 2023 by 2%. Tax breaks and zoning changes have fostered the change.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">&#8220;They set the playbook, then private developers could come and play,&#8221; Scott Rechler, chief executive of RXR, told the<\/span> <em><a class=\"editor-rtfLink\" href=\"https:\/\/www.realtor.com\/news\/trends\/nyc-suburb-brings-down-rents\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Journal<\/span><\/a><\/em><span data-preserver-spaces=\"true\">. The property developer has played a pivotal role in New Rochelle&#8217;s turnaround. He invested $1 billion after the city greenlit his redevelopment plan.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">New Rochelle&#8217;s success in halting rampant rent inflation through investment in development has created a path for other cities to follow, with approvals to build granted in record time. There are dissenters, however. Long-term residents worry about displacement and being priced out, turning the area into a bedroom community for wealthy Manhattanites who <\/span><span data-preserver-spaces=\"true\">are drawn<\/span><span data-preserver-spaces=\"true\"> to luxury, amenity-filled buildings.&nbsp;&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Florida&nbsp;<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Despite the<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/finance.yahoo.com\/news\/6-florida-cities-where-home-130117030.html?guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&amp;guce_referrer_sig=AQAAAFljYmG7Ts0MdCECyu4ufaBfC50tPLXaftlTLN5BQK6Xm99ob1fXETgB-YB9byWpKUK3oQ9tqnEauSTYGr6Gu-y1oG-Z_lCUFV3-an2U-3E2oAev8CDIGdd8vy2eXAGjYzOBrjkIdNFNwDZPwyrb9TFXpejVnY3geSzewS56xygR\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"> bad rap that Florida has received<\/span><\/a><span data-preserver-spaces=\"true\"> regarding overbuilding, rising insurance rates, and extreme weather, the allure of South Florida, particularly Miami, knows no bounds. Around 25% of all new rental apartments in the state <\/span><span data-preserver-spaces=\"true\">are located<\/span><span data-preserver-spaces=\"true\"> in the Magic City. The Miami metro area is poised to deliver<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.miamicondoinvestments.com\/miami-news\/miami-leads-florida-in-new-apartment-construction-for-2025\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"> 15,666 new <\/span><span data-preserver-spaces=\"true\">apartments<\/span><span data-preserver-spaces=\"true\"> this year<\/span><\/a><span data-preserver-spaces=\"true\">, with Miami proper bringing 5,301 units to market and Fort Lauderdale, Hollywood, and Hialeah <\/span><span data-preserver-spaces=\"true\">delivering<\/span><span data-preserver-spaces=\"true\"> the rest.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">The city is also building many luxury residential condos, many of which <\/span><span data-preserver-spaces=\"true\">are rented out<\/span><span data-preserver-spaces=\"true\"> by investor-owners, encouraged by Miami&#8217;s flexible rules regarding<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.wired.com\/story\/luxury-airbnb-high-rises-are-reshaping-miamis-skyline\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"> Airbnb ownership<\/span><\/a><span data-preserver-spaces=\"true\">. Demand has been heightened in the wake of the<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/edition.cnn.com\/2024\/03\/08\/us\/surfside-condo-collapse-investigation-takeaways\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"> Surfside Towers collapse in 2021<\/span><\/a><span data-preserver-spaces=\"true\">, and the need to replace<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biscaynetimes.com\/news\/special-assessments-challenging-condo-owners-to-move-out\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"> many aging buildings<\/span><\/a><span data-preserver-spaces=\"true\">.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Final Thoughts: The Deluge of New Construction Rentals Could Help Smaller Landlords<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Although it might seem counterintuitive, the surge of new construction could present an opportunity for mom-and-pop landlords. That&#8217;s because new buildings with a slew of amenities come with a price tag, even if some are deemed &#8220;affordable.&#8221; New developments receive tax breaks to offer a certain percentage of their units at below-market rents, but they don&#8217;t come close to catering to the vast number of renters struggling to make ends meet due to the high cost of housing.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Almost half of renter households are cost-burdened, according to<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.census.gov\/newsroom\/press-releases\/2024\/renter-households-cost-burdened-race.html\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"> U.S. Census data<\/span><\/a><span data-preserver-spaces=\"true\">, spending over 30% of their income on rent. The<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.jchs.harvard.edu\/blog\/one-three-older-households-cost-burdened\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"> Harvard Joint Center for Housing Studies<\/span><\/a><span data-preserver-spaces=\"true\"> indicates that despite the amount of new housing coming to the market, the plight of unaffordable housing is worsening, particularly amongst older households. The <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/nlihc.org\/resource\/nlihc-releases-out-reach-2025-high-cost-housing\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">National Low Income Housing Coalition<\/span><\/a><span data-preserver-spaces=\"true\"> (NLIHC) noted that the average hourly wage needed to afford a modest two-bedroom rental is $33.63, which is almost five times higher than the federal minimum wage of<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.dol.gov\/general\/topic\/wages\/minimumwage\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"> $7.25 per hour<\/span><\/a><span data-preserver-spaces=\"true\">. The average U.S. wage is currently $28 an hour, according to<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.ziprecruiter.com\/Salaries\/American-Salary#:~:text=As%20of%20Aug%2025%2C%202025,percentile)%20across%20the%20United%20States.\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"> ZipRecruiter<\/span><\/a><span data-preserver-spaces=\"true\">.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">For example, an apartment costing $1,500 per month in parts of the Midwest and Texas is<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.credaily.com\/briefs\/apartment-space-costs-in-2025-top-cities-for-1500-rent\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"> not even a remote possibility<\/span><\/a><span data-preserver-spaces=\"true\"> in many coastal cities, such as New York, Boston, and multiple cities in California. <\/span><span data-preserver-spaces=\"true\">This<\/span><span data-preserver-spaces=\"true\"> means that a large section of the population, who are working and earning an almost average U.S. income, is being left behind by the influx of new apartments.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">For smaller investors purchasing single-family or two-to-four-unit buildings in and around large metropolitan areas with a high level of construction, there is likely to be a significant number of renters who can afford to pay rent for a modestly priced apartment without the bells and whistles of a new apartment building.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>By the end of 2025, over 500,000 newly constructed rental apartments are expected to hit the U.S. market, significantly increasing inventory and helping to alleviate the housing shortage, according to [&hellip;]<\/p>\n","protected":false},"author":613725,"featured_media":184598,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[8],"tags":[],"class_list":["post-184593","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-trends"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/184593","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613725"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=184593"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/184593\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/184598"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=184593"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=184593"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=184593"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}