Between 2014 and 2016, the Houston multifamily market struggled with an issue of oversupply as a result of accelerated apartment construction. When Hurricane Harvey hit in 2017, Houston residents displaced by the storm produced a surge in apartment demand that helped fill thousands of empty units over the ensuing 12 months. Fast forward to 2019, and two key factors are keeping a strong apartment pipeline flowing and forcing developers to play catch-up: new residents and more jobs. Over the past two years, demand has outpaced deliveries, a welcome sign for investors following the 2014-2016 era. More than 20,000 units came on line in 2016 alone and caused absorption to lag. According to the U.S. Census Bureau, steady increases in population have Houston competing with Chicago for the title of third-most populous city in the country. This demographic trend, coupled with the city’s strong labor market, has created a setting wherein capital keeps trying to find its way into the Bayou City. Underpinning the need for more housing product was the 94,000-plus new residents added during the last year, which ranked Houston’s net migration in the top three of U.S. metros. Given the rise in demand stemming from jobs and in-migration, …
