From staff reports
The Sioux Falls area is among the top places in the nation with a need for more apartments, a new study reported.
Data from the National Multifamily Housing Council and National Apartment Association concluded that the Sioux Falls metro area will need 4,661 new apartment units by 2030 to keep up with demand.
That’s a 27 percent increase from the current inventory, ranking the metro area No. 13 out of 50 areas studied for apartment demand.
If the projections are correct, Sioux Falls would need to build an average of 333 apartments a year. Last year, the city issued permits for 1,589 units, not counting some small apartment projects in surrounding communities. So far this year, Sioux Falls has issued permits for 424 units.
“Nationally and here in Sioux Falls, we’re experiencing fundamental shifts in our housing dynamics, as more people are moving away from buying houses and choosing apartments instead,” said Brian Majerus, president of the South Dakota Multi Housing Association. “Economic prospects are good in Sioux Falls, and the area is expecting mild population growth from a combination of migrations to the area and natural population growth. New renters will span a range of ages, from millennials to baby boomers. Today’s renter households have good incomes and are comprised of smaller households. Our rental stock is older, but we do have fewer older, more affordable units than other metro areas.”
Demand is being driven by the aging population, immigration and delayed home purchases. The demand for new apartments is strongest in the western U.S., Texas, Florida and North Carolina.
“Demand for apartments will steadily increase here,” Majerus said. “We will need to build new apartments to meet the expected increase in demand in our metro area, which would boost our local economy in the coming years.”
There also will be a growing need for renovations and improvements on existing apartment buildings, as the research found 51 percent of the apartment stock was built before 1980, which translates into 11.7 million units that could need upgrading by 2030.