Matching housing construction with need has never been easy, but it seems to have become increasingly difficult.

For years after the Great Recession, the U.S. fell behind in building enough multifamily units. That came into highlight during the Covid-19 pandemic when millions found themselves working from home. The 2022 year saw the highest number of multifamily construction starts since the 2007-2009 period, according to the Federal Reserve Bank of Atlanta.

Research from the Atlanta Fed shows that the amount of time it takes to build housing has grown, largely due to the increased time it takes for the planning stage. On average, projects take three-to-four months longer for planning, which includes permitting, than for physical construction. One practical result is that the industry is slower to respond to market forces, which creates a form of inertia. Development takes longer to respond and create new housing when needed and the extended time also means it takes more time to slow the response when the amount of housing has, at least for a while, caught up in a given market. Things keep going, creating an increased number of new units.