Leveling Out  
What to Expect  
from Multifamily  
Construction  
in 2017  
b y E l l e n R o g e r s  
a n d N i c k S t . D e n i s  
ir Isaac Newton was right: what is set to retreat for the second straight to buy single-family homes,and others  
goes up must come down. And year, sliding 5 percent in 2016 and an- were forced to move from owning to  
S
that seems to be the case for other 2 percent in 2017.  
renting. Also, millennials favored liv-  
ing in urban areas, while a booming  
retirement community spurred condo  
According to Dodge’s report, “the development.  
Today, consumers are buying again,  
the multifamily construction industry.  
This segment had enjoyed significant Why the Drop?  
growth for the five years prior to 2016,  
before beginning its plateau,which will rental side of the housing market in-  
likely continue this year. Multifamily creased at the expense of the owners which is helping push the growth in  
building had carried the residential market” during the multifamily ex- single-family. This is due to a some-  
sector throughout the economic recov- pansion. “As the single-family market what recovered economy, as well as the  
ery, but that trend is shifting toward more fully recovers from its hangover fact that millennials are getting older  
single-family housing, according to multifamily housing is now losing and looking to buy their first homes.  
Dodge Data & Analytics’ 2017 Dodge steam … 2015 appears to be the peak  
According to Murray, low mortgage  
rates and low inventories should also  
Construction Outlook.  
of the cycle for multifamily housing.”  
While apartments led the early up- help strengthen single-family housing.  
“However, the 20-percent down pay-  
According to Dodge chief economist  
Robert Murray, who spoke during the turn for multifamily, condominium  
group’s annual Outlook Conference development has returned, Murray ment requirement is still restraining  
last October, residential construction said. The multifamily segment was first-time homebuyer demand, along  
as a whole is estimated to advance 5 helped by a push for downtown rede- with high student debt of the millen-  
percent in 2017 in number of units, velopment, and demographics have nial generation,” he said, adding that  
following a 2-percent gain in 2016 and provided support, from both emp- a shift in demographic demand could  
a 12-percent spike in 2015.Single-fam- ty-nesters and young adults.  
contribute to an improved single-fam-  
ily housing specifically is expected to The Great Recession saw the spike ily housing market, but it depends on  
climb 9 percent after a 7-percent in- for the rental segment, as many people whether millennials will continue to  
crease in 2016. Multifamily, however, couldn’t afford mortgages or get loans prefer living in urban developments.  
46  
USGlass, Metal & Glazing | February 2017  
www.usglassmag.com  
Glazier Perspective  
Contract glaziers agree that 2017  
will likely see declines when it comes  
to certain multifamily projects. Dan  
Romine, vice president of Architec-  
tural Glass & Aluminum in Irvine,  
Calif., says that in California, where  
his company is headquartered, he  
expects mid- and high-rise residen-  
tial project starts to slow down, with  
low-rise construction continuing at a  
healthy pace.  
“As far as the market conditions,  
the multifamily residential segment  
continues to be healthy in the short  
term, but there will be a lot of com-  
pleted projects hitting the market in  
2
of different residential product  
017,” he says.“We see the full range  
Source: Dodge Data & Analytics’ 2017 Dodge Construction Outlook  
types and uses being built. Along While multifamily construction has shown steady gains since 2010, forecasters  
with high-rise residential construc- expect it will lose some momentum over the next few years.  
tion, there are many low-rise five-  
to six-story stick-framed projects,  
sometimes over a retail base. Both  
products are sold as condominiums  
or as rental properties, although the  
Location, Location, Location  
majority of the low-rise projects are  
rentals.”  
It’s the rental properties, he adds,  
he New York metropolitan area has dominated multifamily construc-  
tion during the last few years. According to Dodge, the dollar amount  
T
of multifamily starts in New York City reached $21.6 billion. This ac-  
counted for 26 percent of the nation’s total and eclipsed the sum total starts  
of the next seven metropolitan areas.  
More than half of all multifamily construction was concentrated in eight  
metropolitan areas (see list). Increased construction in markets such as  
Chicago and Atlanta is helping partially offset a decline in the New York area,  
according to Dodge.  
that tend to be more appealing com-  
pared to condominiums, which can be  
risk-adverse, “given the possibility of  
homeowner association construction  
defect litigation.”  
Coleman Jones, director of  
business development with Pioneer  
Cladding & Glazing Systems in  
Mason, Ohio, adds that the condo  
market seems to have been growing.  
the market is strong,” he says.  
As far as multifamily/apartments,  
Jones expects this year to be much  
like 2016.“With the office market slow-  
ing down a little, housing should con-  
tinue to rise,” he says.  
According to USGlass magazine’s  
017 Glass and Glazing Industry Out-  
2
look Report (see page 34), of the eight  
segments covered in the Outlook  
survey, multifamily ranked fifth in  
terms of the biggest sectors that saw  
an uptick. Looking forward, however,  
only 34 percent of glaziers expect  
multifamily to increase in 2017, again  
ranking fifth.  
Source: Dodge Data & Analytics’ 2017 Dodge Construction Outlook  
While New York remains a major market for multifamily construction, the  
metro area was down in 2016, while Chicago increased 140 percent.  
continued on page 48  
www.usglassmag.com  
February 2017 | USGlass, Metal & Glazing  
47  
Leveling Out continued from page 47  
On Trend  
tegration and performance issues are  
“Products that offer flexible fab-  
When it comes to multifamily con- more critical now than ever for resi- rication and installation are in high  
struction, a variety of glazing products dential products, as it relates energy demand. …and, in urban areas, the  
are seeing strong interest—particu- savings, acoustics, water/air manage- demand for views and the ability to  
larly those that can offer high-perfor- ment, and mechanical intake/exhaust.” bring the outdoors in have architects  
mance benef ts.  
Typical of the last few years, the fa- sales for Kawneer Company Inc., says cony doors to be easily integrated into  
cades range from custom, articulated from his company’s supplier perspec- a window wall system.”  
Colin Brosmer, vice president of requesting solutions that allow bal-  
curtainwalls,to standard window walls tive, they continue to f nd that archi-  
integrating operable windows and ter- tects, customers and building owners seeing is a continued desire for green  
race doors,” says Romine. “System in- are faced with tight project deadlines. features, ranging from healthy interior  
solutions to high-thermal-performing  
Brosmer says another trend they are  
façade solutions or sun-control systems.  
These features allow building own-  
ers to add value to their units and pro-  
vide tenants with increased comfort,  
energy eff cient spaces, and improved  
quality of life,” he says.  
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Steve Schohan, marketing and  
communications manager at YKK  
AP America, says his company is also  
seeing a number of trends across the  
multifamily segment. These include  
sustainability as well as a re-emer-  
gence of suburban living.  
“Across the construction industry we  
are seeing developers and architects in-  
corporating sustainable elements into  
their designs,” says Schohan.  
Speaking of suburban living,he adds,  
“While developers have primarily fo-  
cused on urban development over the  
past f ve years,in 2017 we will see a shift  
toward more suburban development  
with urban-living amenities. These  
spaces provide multi-family living op-  
tions for residents who choose to be  
renters in a suburban setting, with din-  
ing, retail and transportation options  
within a walkable distance.” Schohan  
says his company has also seen a trend  
toward neighborhood revitalization in  
retrof tting existing construction. n  
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E l l e n R o g e r s is  
the editor and N i c k  
S t . D e n i s is the  
research editor of  
USGlass magazine.  
Follow USGlass on  
Twitter @USGlass and  
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receive updates.  
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48  
USGlass, Metal & Glazing | February 2017  
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