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Dive Brief
- The time to build an apartment building increased by 0.1 month, or about 3.5 days, to 19.9 months in 2023, according to the National Association of Builders‘ recently published analysis of the Census Bureau’s 2023 Construction Survey.
- The relatively smaller increase in leave completion time in 2023 was a dramatic improvement compared to the 2.3 month increase in 2022.
- In the western region, clearance took 20.9 months to complete, while in the northeast it took 20.8 months. The South followed with 19.5 months, while the time to build took only 17.3 months in the Midwest.
Diving knowledge:
Not surprisingly, the size of the building plays a large role in the time to complete a project. Properties with 20 or more units took 22 months to complete after getting the go-ahead in 2023. Those with 10 to 19 units took 21.5 months, while buildings with five to nine units took require 16.9 months. Interestingly, buildings with two to four units required more time, 18.7 months, than buildings with five to nine units.
Compared to pre-pandemic development times, only five- to nine-unit buildings took a similar amount of time to complete. In 2019, the permit deadline to build two- to four-unit buildings took 3.3 months less to complete. Ten to 19 unit projects took 2.8 months less, while 20 or more unit projects required three months less.
“This could be an effect of scale related to smaller builders building these types of units, and there were supply chain issues, but there’s no hard data to show that,” said Robert Dietz, an economist head of the NAHB, at Multifamily Dive.
After COVID-19 hit the US in 2020, the construction industry suffered from supply chain issues and material shortages for several years.
Although the number of starts fell in 2024, Dietz said it was difficult to predict whether the permit completion time would be reduced.
“Frankly, the 2024 data will be affected by tight financing conditions and the broader slowdown,” he said.
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