Rental options have boomed in the Spring-area as roughly 20 multifamily developments have opened, broken ground or been announced since June 2023.

According to prior reporting and data analysts MRI ApartmentData, nine apartment complexes and two rental townhome properties have opened in the Spring and Klein area since August 2023. Meanwhile, six properties are slated to open between August and the first quarter of 2026, and three more are being planned.

Real estate experts said developers started multifamily projects two or three years ago when interest rates were at record lows. Bruce McClenny, industry principal for MRI ApartmentData at MRI Real Estate Software, said because of this trend, he saw more apartment complexes open in 2023 and 2024 than in his entire career.

According to MRI ApartmentData and previous reporting, some of the latest projects to open include:Two multifamily options are also slated to open next year along FM 2920:
  • Prose Foster: a 297-unit apartment complex expected to open by January
  • Saxon Pond Flats: a 360-unit apartment complex set to be completed in spring 2025
A spike in multifamily housing in the Spring area can likely be attributed to regional population and job growth and nearby retail development, said Steven Spillette, president of real estate research firm Community Development Strategies.

“At a very basic level, we ... have to have housing for everybody ... coming here,” Spillette said.


For multifamily housing projects to reach completion recently, developers and investors must have been purchasing land at least two to three years ago, Spillette said. However, he noted interest rates have since risen.

“We are having a pause because of ... [raised] interest rates, and the developers have been having ... difficulty in getting financing in the last year,” Spillette said.



Also of note


Patrick Jankowski, chief economist and senior vice president of research for the Greater Houston Partnership, said in a May multifamily market update that Houston has shifted to a tenant-friendly market, because:
  • Average multifamily occupancy is below 90%.
  • Rental rates have fallen over the last year.
  • Incentives such as free rent are prominent.
  • Developers continue to overbuild.
The Spring area’s average occupancy rate dropped from 92.6% in June 2022 to 86% this May, according to MRI ApartmentData.

With 19,000 units under construction in the Greater Houston area and another 33,000 planned as of June 1, Jankowski said supply greatly exceeds demand.

“An industry rule of thumb holds that Houston absorbs one apartment unit for every six jobs created,” he said. “At the current pace ... Houston will need to create 114,000 jobs to absorb what’s currently under construction.”
What else?

As more multifamily housing is built, this may push older complexes to lower rent or become subsidized to stay competitive, said Ty Jacobsen, a senior market and data analyst for Community Development Strategies.


The Houston Association of Realtors reported only 40% of Greater Houston-area households could afford a median-priced single-family home in the first quarter of this year. For Spring, in the same time frame, the median monthly mortgage payment was $2,030 including taxes and insurance, according to HAR—about 13% higher than the median base apartment rent of $1,775.

Alongside the Spring-area traditional multifamily housing options are two low-income 4% tax credit housing projects and two 9% tax credit projects. Torrey Chase opened in May while the other three projects have yet to open. Under the Texas Department of Housing and Community Affairs tax credit programs, developers can earn tax credits for low-income housing projects.

Pedcor Investments is planning Willow Creek Manor to be located at the intersection of Hufsmith-Kohrville and Cossey roads in Spring.

“This site in particular was attractive since the residents will have access to plenty of jobs nearby, ... to Tomball Parkway, for any commuters, ... [and] to good schools,” Jen Latsha, Pedcor’s vice president of development, said in a May 1 email.
What to expect


Because interest rates have roughly doubled since around early 2022, the cost of financing new apartment projects is much less sustainable for developers today, McClenny said.

“[Higher interest rates cause] a lot of problems for ... companies to have to ante up more capital to cover that,” he said. “In Gulf Coast markets, ... insurance has really gone through the roof.”

Apartment operators are paying more than double the price for insurance now than they were before the COVID-19 pandemic, according to data from RealPage, a property management software corporation. Houston apartment owners pay an even higher premium due to the region’s recent history of inclement weather events at $128 per unit per month, or $1,540 annually.