I was referring to the next year. Isn't the incentive program primarily for office conversions? I’d expect most of those projects to move forward.
In 2024, there were 11,505 multifamily starts, a 27% increase over 2023. Given that, I expect 2025 starts to moderate closer to 2022/2023 levels—which is still a significant number. That said, I could be completely off and overestimating the impact of the immigration policy.
But if you're a rental developer, how do you underwrite apartment rents two years out? What interest rate do you assume for your takeout mortgage? Rents have already dropped about 10% in the past six months, and bond yields remain highly volatile, with significant uncertainty around where the economy is heading. Right now, there aren’t a lot of strong indicators or incentives for developers to build more rentals.
I've spoken with several developers, and opinions are mixed. Many are moving forward, assuming they'll achieve rents similar to today, while others—myself included—are taking a more defensive approach and scaling down.