Multifamily Rental Permit Activity Soars

DENVER-In the first 10 months of the year, developers pulled 8,351 permits for multifamily units, 26.76% more than the 6,588 permits issued in the seven-county metro area during the same period in 2000, according to the most recent Home Builders Association of Metropolitan Denver. But, there already are signs that the permit activity, which measures future growth, is slowing.

“These are all projects that were in the pipeline,” Steve Rahe, an apartment broker with CB Richard Ellis tells GlobeSt.com. “Developers were seeking approval for these projects in 1999 and 2000, when there was a shortage of supply.”

Rahe tells GlobeSt.com that permit activity will be slowing next year.

In fact, the slowing process already appears to have started.

In October of this year, there were only 621 apartment permits issued, about 20% fewer than the 771 permits issued in October 2000.

“By 2003 and 2004 we probably will be back to somewhat normal levels that we saw from 1995 to 2000,” Rahe tells GlobeSt.com.

He says there may be some short-term overbuilding in some submarkets, but the Denver-area is in much better shape as far as supply and demand than many other areas of the country.

“Certainly, we will not see any overbuilding from a long-term view,” Rahe adds. “Othercities like Phoenix and Las Vegas and Dallas suffered from a bit too much development for longer periods of time than Denver has. In Denver, we’re probably not even in danger of overbuilding over the medium-term.”