Multifamily permitting has increased in nearly half of the top 100 largest metros through the first six months of 2025, compared with the same period last year driven by strong underlying demand. The trend, which follows a decrease in multifamily permitting volume across the country during 2023 and 2024, signals potential stabilization this year for development in the sector, according to research from Arbor Realty Trust and Chandan Economics.
Southwest Florida markets, North Port and Cape Coral, led the nation in multifamily permitting per capita, the report found. North Port authorized 31.4 units per 10,000 residents while Cape Coral green-lighted 29.7 units per 10,000 residents, as of June.
“Florida’s multifamily development momentum may seem counterintuitive, considering its southwest corridor is in the middle of a deep housing market price correction,” the research read.
“However, as a result of the for-sale market’s softness, many would-be buyers are staying on the sidelines — supporting rental demand. Robust population growth has also strengthened the rental markets in North Port and Cape Coral. Both metros have been gaining new residents at twice the annual national rate of 1%.”
In general, permitting increased in development-friendly markets with more permissive zoning regulations, Arbor and Chandan noted. Columbus, Ohio, ranked third in permitting thanks to a stable employment base and anticipated expansion in its semiconductor manufacturing sector. Orlando and Richmond, Virginia, were also among the top five markets for multifamily permitting.
Meanwhile, Des Moines leads the pack in the pace of multifamily permitting growth, with 1,576 in total issued, up from 187 at the same time last year. That represents an increase of 743% as population growth in the market has pushed demand higher and spurred local developers.
Baton Rouge, Louisiana, saw multifamily permitting increase 405% year-over-year during the first half. This is a notable uptick as it does not appear to be driven by population growth, which has only risen 1.4% since 2020, but rather due to a surge in property insurance premiums and elevated mortgage rates, making homeownership less affordable in the metro. New development is also being driven by the metro’s aging rental stock, the need for hurricane-resistant housing and demand for off-campus student housing.
Knoxville, Tennessee, came in third, experiencing a 305% increase in multifamily permits. Both for-sale and rental housing in the market are expected to experience growing pricing pressure over the coming year, due in part to rising demand, according to Arbor and Chandan.
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