RTAF Multifamily Model

Relationship between Housing Demand and Supply Data

Home-ownership decisions impact the demand for space and should be considered in the context of the inventory of units in the housing market. Any decline in the home-ownership rate implies a drop in the number of owner households. The move from home-ownership to renting benefits the rental market and this increase in renters then flows both to single-family rentals and multifamily rentals.

Multifamily Demand Calculations

Total Housing Units = Total single-family (1-4) units + total multifamily units + vacant units

Single-Family Units = Total housing units – multifamily units – vacant units

Multifamily Units = Total housing units  single-family units – vacant units

Homeownership Rate = Homeowners / total households


Step 1 – Population Forecasts

EASI Demographics, Inc provides the legacy data which includes total housing units and forecasted housing units. This constitutes the universe of records and the baseline for determining housing demand.

Step 2 – Non-Multifamily Forecasts

Next, the single-family occupied units are subtracted from the total housing units providing the total renter qualified pool.

Step 3 – Vacancies

The number of vacancies must be subtracted from the total renter qualified pool providing the total gross demand for rental multifamily.

Step 4 – New Residential Building Permits 

New residential building permits must be taken into account when considering a new multifamily development. New permits are reduced from the total gross demand arriving at total net demand.

Step 5 – Penetration Rate

The penetration rates are an empirical assumption derived from

Step 6 – Revenue Capture Opportunity Potential


New Multifamily Demand Conclusion

In this analysis, we investigated the relationship between economic trends and the rental market at the national level, assuming no housing policy changes. Based on our framework that focuses on the entire residential market, we developed an indirect approach to forecast future home-ownership and new multifamily demand. The analysis considers the impact of single-family rental units on the multifamily rental demand.