The self-storage boom that surged through the pandemic is running into resistance on multiple fronts, as slowing demand collides with a growing backlash from local communities pushing to limit where — and whether — new facilities can be built.
"There has never been a period with more people using self-storage than today," Noah Starr, CEO of market data vendor TractIQ, told The Wall Street Journal. He said that more than 12% of U.S. households keep overflow belongings in rental spaces, while his firm estimates another 164 million square feet of self-storage is currently under development.
That rapid expansion, however, is increasingly clashing with local officials who argue that large, often remotely operated facilities are consuming valuable land while contributing little to neighborhood vitality. Some regulators say the buildings create dead zones, particularly as corporate operators scale up sprawling, warehouse-style locations.
Communities across at least 15 states have enacted bans on new self-storage developments, according to Modern Storage Media. Others have stopped short of outright prohibitions but imposed strict limitations. Denver, for example, restricts new facilities to within a quarter-mile of light-rail stations, while Sacramento has barred units in a stretch of Stockton Boulevard and Broadway to encourage a more walkable environment.
Some policymakers point to consumer behavior as a root cause of the sector's growth.
"People buy stuff they don't really need and then hold onto it," Miguel Sanchez, a Providence city council member who pushed for a ban enacted in 2023, told the Journal.
In response, developers and municipalities are negotiating compromises to soften the visual and economic impact of new projects. In Delta Township, a suburb of Lansing, Michigan, officials are steering storage businesses into industrial-zoned areas rather than banning them outright.
Elsewhere, developers are experimenting with design and mixed-use strategies to win approvals. In Bristol, Rhode Island, a new facility was built with a façade resembling a disorderly row of houses to better blend into the neighborhood.
Some operators, including SoCal Self Storage, have incorporated retail elements such as a laundromat or a Thai restaurant into their projects. Others are adapting existing buildings, such as Stuf Storage's 17,000-square-foot facility inside the SAG-Aftra building in Los Angeles.
At the same time, industry data suggests the sector's momentum has been cooling, with Yardi Matrix's National Self Storage Report tracking a shift over the past several years. In 2023, the firm described the industry as being in a "comfortable position" as street rates normalized. By 2024, headwinds had emerged, and annual street-rate growth remained negative nationwide. In 2025, REITs reported revenue declines tied to falling occupancy and rates. And this year, results point to "modest stabilization amid soft demand."
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.