The multifamily housing boom in Birmingham has brought billions into the Alabama state economy, and the trend is set to continue through 2015. Bryan Davis of the Birmingham Business Journal reports that “the area has had significant impact from the multifamily industry for the past couple of years.” Citing a study from the National Multifamily Housing Council and the National Apartment Association, Davis says that, “Birmingham had an economic contribution of $2 billion in 2013 from the multifamily market.”
According the report, this is a significant departure from the city’s standard residential composition. The study says that Birmingham’s metro economy has historically had “one of the nation’s lowest multifamily occupancy rates because of its aging population and weak employment growth,” but that The University of Alabama at Birmingham “supports rental demand and helps backstop the area economy.”
Yet the Birmingham metro’s economy has slowly strengthened over the past five years, making for a stronger job market that has been drawing Millennials to the city. The abundance of opportunity has drawn so many young professionals that the city ranked #2 in the nation for Millennial home buyers in 2014.
More than $58 million was spent on multifamily construction in 2013, which supported 375 jobs. Until 2014, the Birmingham metro area had 120,000 residents living in 64 apartment homes, supporting nearly 23,00 jobs in the metro area. 1,300 of those jobs came from the apartment management field, which are supported from the $186 million in operating costs paid by the multifamily properties.
Rental demand has increased along with the city’s economic upturn, leading to the absorption of 1,200 rental units during 2014, a 380 percent increase over the 10-year average of 250 per year. There is currently more than $100 million in apartment construction taking place in the downtown area. Nearly 2,000 units are set to be opened in downtown within the next two years. In mid-2015, the Bomasada Group’s $40 million complex, The Metropolitan, will be the first of these projects to come online.