Displaced Residents Boost Rentals, Accelerating Recovery

Housing impacts are not as severe as originally estimated but multifamily supply is decreasing.

HOUSTON—Hurricane Harvey was the strongest storm to hit the region in more than 55 years, dumping 1.2 trillion gallons of rain in a matter of days. A quickly draining construction pipeline and reduced inventory due to flooding is causing supply to tighten.

At the same time, demand from displaced single-family residents, contract workers and natural growth is favoring landlords in increased rentals. Harvey effectively accelerated the multifamily recovery timeline, propelling Houston into a landlord-favored market approximately 18 months ahead of schedule. Pre-Harvey, multifamily absorption exceeded deliveries by almost 2,000 units, driving market-wide occupancy gains through August 2017, according to a report by CBRE. Occupancy has tightened by 120 basis points while net effective rents have risen by 1.5% since the passing of the storm, according to Apartment Data Services.