Developers started construction last year on more than 9,200 residential apartments in the D.C. area, according to Delta Associates, contributing to a pipeline of nearly 33,700 units likely to deliver in the next three years.
And condo units? Just over 1,700. While stark, the imbalance isn’t surprising for a number of reasons, among them the swell of millennials who want to rent rather than own. But at or near the top of that list is money; it’s become that much harder to line up equity to secure the financing for for-sale projects since the 2008 housing bust.
Greenbelt-based homebuilder The Bozzuto Group, which ranks among the D.C. region’s largest commercial developers and Greater Baltimore’s largest homebuilders, believes it’s come up with a way of closing the gap — at least for new projects in its pipeline. An affiliate of its housing unit has launched a new fund to help steer equity into projects in need.
“Homebuilding equity has not exactly been the most prevalent thing in the market for the past few years because of the post-2008 dynamics,” Bozzuto Group President and CEO Toby Bozzuto said. “We created a vehicle to complement our own equity so we can do more projects.”