Multifamily Development Shifts To Bigger Low-Rise Communities Article originally posted on Globe St. on July 21, 2026 Building out instead of building up is quietly reshaping the multifamily landscape, and it is happening even as new supply pulls back from 2024’s breakneck pace. According to a new analysis by Chandan Economics for Arbor Realty Trust, the post‑boom pipeline is tilting toward larger, low‑rise communities that lean into renter preferences and cost realities rather than skyline‑altering towers. For investors, that shift in what gets built and where is likely to influence which assets will prove most resilient as homeownership remains out of reach for many households. Multifamily Supply Pulls Back, But Not Evenly After a record year in 2024, multifamily completions fell sharply in 2025, dropping from 591,000 units to 468,000 units, Chandan Economics finds. The pullback has not been uniform across the sector. Smaller multifamily projects took the bigger hit, with completions in this category falling 27.2% to 190,000 units in 2025. Larger multifamily properties saw a more modest 15.8% decline, ending 2025 with 278,000 completed units. That divergence points to a structural tilt toward larger properties, even as overall development cools. Some 59.4% of the units completed in 2025 were in buildings with 50 or more units, up from 55.8% in 2024’s construction boom, according to the Chandan analysis. The report describes this bias toward scale as “a defining and enduring feature of the past decade’s multifamily construction environment.” For developers and capital providers, the pattern underscores where risk and opportunity are concentrating. Larger projects are better positioned to spread fixed costs, support on‑site amenities and management and appeal to institutional capital that wants efficiency in both operations and deployment. At the same time, the steeper decline in smaller projects may exacerbate the shortage of attainable units in some locations, reinforcing the need for new supply even as financing and cost pressures bite. Developers Favor Scale And Low Rise Chandan Economics attributes the move toward larger projects in part to the search for economies of scale as developers contend with higher upfront capital requirements, more challenging financing conditions and elevated project risk. High land costs, shifting renter expectations and the difficulty of sourcing suitable sites add to the pressure. In that context, concentrating units into larger properties can make underwriting and execution more viable, especially for sponsors who need to show durable cash flow potential in an uncertain rate and demand environment. Yet, while projects are getting larger, they are not necessarily getting taller. The analysis highlights a clear pivot toward lower‑rise buildings of four stories or less. By 2025, low‑rise properties accounted for 60.5% of completions, up from 56.6% in 2024, signaling a sustained preference for this format. That trend aligns with growing demand for garden‑style apartments in lower‑density settings where high‑rise construction is either less feasible or out of step with local preferences. For investors, the combination of larger communities and lower‑rise construction has several implications. Garden‑style and mid‑rise assets in suburban or exurban locations often offer more land for amenities, easier parking and a living experience that can feel closer to single‑family rental, which is increasingly attractive as households get priced out of homeownership. At the same time, these projects can avoid some of the cost and complexity associated with high‑rise construction, potentially supporting better risk‑adjusted returns when executed in the right locations. Unit Sizes Shift With Renter Needs The physical product inside these buildings is changing as well. Census Bureau data cited by Chandan Economics show that multifamily completions with more than one bedroom increased from 47% in 2024 to 49.6% in 2025. That shift suggests developers are leaning into demand from households that need more space, including families and renters who are delaying or forgoing home purchases. Larger unit sizes can serve as a competitive differentiator in markets where affordability constraints have turned renters into longer‑term residents rather than transient, short‑stay tenants. For investors, that can translate into stickier occupancy and potentially lower turnover costs, especially when combined with the amenity packages and community feel that garden‑style and low‑rise properties can offer. The trends that Chandan Economics identifies point to a multifamily sector that is recalibrating rather than retreating. Overall completions are down from peak levels, but within that decline, developers are doubling down on larger, low‑rise communities with more spacious units that cater to cost‑conscious yet space‑hungry renters. In an environment where many households will continue to rely on rental housing as homeownership becomes less attainable, these design and scale choices are likely to shape the next generation of core multifamily holdings. Investors who understand how and where this “build‑out, not up” model is gaining traction will be better positioned to identify assets that can hold their own through the next cycle.