Report: Bay Area apartment construction sluggish

While U.S. apartment construction activity is at a historic 50-year high, the Bay Area is seeing a drop in production compared to last year, according to RentCafe’s annual apartment construction report.

This year, 420,000 new apartments are expected nationwide. The last time the nation saw more than 400,000 apartments built in a year was in 1972.

But the San Francisco Metropolitan Area (San Francisco-Oakland-Berkeley) is expecting 7,400 new units this year, a 26% drop from last year, according to the report. 

The San Jose Metro Area (San Jose-Sunnyvale-Santa Clara) will see a little more than 3,000 new apartments come online by the end of the year. That’s half the number of units completed in 2021 and closer to the levels of construction recorded during the pandemic, the report shows. 

Details of apartment construction around the Bay Area from the report:

• There is strong apartment development in San Francisco, with 1,124 apartments already built in 2022. Other cities in the San Francisco Metro Area seeing strong apartment construction are Fremont, with 958 units; San Mateo, with 824 units; and Oakland, with 816 new apartments.   
• San Jose has a little over 1,000 rentals projected for 2022. Sunnyvale follows closely with 823 new units, while Santa Clara is set to add about 500 new apartments by the end of the year.  
• Santa Rosa-Petaluma will see 974 new apartments by the end of the year.

“The construction industry…is still being hampered by three familiar challenges: labor shortages; material costs and availability; and supply chain issues,” said Doug Ressler, manager of business intelligence at Yardi Matrix.