Slow Multi-Family Development Building Progress thanks to NIMBY
NIMBY is a quickly spreading movement. Standing for Not in My Back Yard, this movement has been gaining steam in neighborhoods made up of mostly single-family homes and homeowners. These homeowners do not want certain types of developments in their neighborhood for fear of depressed housing prices and a “specific type of person” that comes with them. These homeowners are pushing back, specifically against new developments housing multifamily units.
This attitude, along with housing regulations, keeps builders from adding these types of properties in areas that sorely need them. According to Steve Lawson, chairman of National Association of Homebuilders Multifamily Council, “Multifamily builders and developers are seeing strong demand, but there are headwinds that have impacted development.”
Much of the decline in overall sentiment comes from the market-rate and condo categories. The NAHB report states that the MPI fell two points to 51 compared to the previous quarter. The MPI is measured on a scale of 0 to 100. A number above 50 indicates that more respondents report conditions are improving than getting worse.
The 3 Components of MPI:
- The construction of low-rent units – apartments that are supported by low-income tax credits or other government subsidy programs
- Market-rate rental units- Apartments that are built to be rented at the price the market will hold;
Economists say that the development will necessitate continuous tracking, but for now, we are doing alright.
However, as lumber prices continue to rise with increasing tariffs, we need to be vigilant and consider the regulations that may come into play as the market changes. We will need to continue to plan for these and other changes that could halt the market even further.
The NIMBY movement does not stop with housing though. Many neighborhoods are similarly frustrated with airports, landfills, shopping malls, hospitals, power plants, factories, or even wind turbines being added to their neighborhood.