Real estate experts said developers and investors began planning multifamily projects during the coronavirus pandemic when interest rates were at record lows. This caused more apartment complexes to open in 2023 and 2024 than Bruce McClenny, industry principal for MRI ApartmentData at MRI Real Estate Software, said he has seen in his entire career.
When there’s limited land availability in mature communities, such as Sugar Land and Missouri City, multifamily housing will increase to meet the needs of young professionals and empty nesters, PASA demographer Susan Cates said.
Sugar Land and Missouri City officials said they’re carefully assessing developments as the cities near build-out.
Two-minute impact
More than 12,300 apartment units are set to open within Fort Bend ISD’s boundaries between 2023-33, accounting for about a third of all new incoming housing units, according to PASA’s report.
In the next five years, a bulk of the apartments are poised to open near commercial areas or along major thoroughfares, such as Hwy. 59 and Fort Bend Parkway Toll Road, Cates said. Accessibility and walkability to grocery stores, restaurants and retail is a determinant for developers deciding where to build apartments.
“That’s a lifestyle that a lot of people are really looking for,” she said.
Meanwhile, two developments will break ground in the fourth quarter of 2024 in Missouri City.
- Sueba USA will bring a Class A 346-unit development to Fort Bend Town Center III, Sueba USA officials said.
- Dhanani Private Equity Group’s Territory at Missouri City, a 280-unit complex, is coming near the same intersection, Dhanani officials said.
Hundreds of apartments are also planned to join mixed-use redevelopment projects in Sugar Land including The Pearl—part of Lake Pointe Plaza at the former Fluor Daniel building—and the Imperial Sugar district, Community Impact previously reported.
Sueba USA is also set to bring a 273-unit apartment complex called Marketplace Lofts to the corner of Imperial Boulevard and Ulrich Street, within the historic Imperial Refinery District, Blanchard said. However, the timeline is contingent on the rest of the district’s build-out.
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 from a landlord-friendly 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 and security deposit waivers are prominent.
- Developers continue to overbuild.
With 19,000 apartment units under construction in the Greater Houston area and another 33,000 planned for the region as of June 1, Jankowski said supply exceeds demand for multifamily housing.
“An industry rule of thumb holds that Houston absorbs one apartment unit for every six jobs created,” he said in the report. “Houston will need to create roughly 114,000 jobs to absorb what’s currently under construction. The partnership’s forecast calls for the region to create half that many jobs—57,000—this year.”Digging deeper
City land use plans help determine where apartments can be built.
Missouri City has two multifamily zoning districts as well as planned development districts, which allow multifamily as part of mixed-use projects, said Jennifer Thomas Gomez, Missouri City director of development services.
“Missouri City’s planning board is very particular with what developments they want to see happen in their city, and for good reason,” Faiz Hirani, Dhanani Private Equity Group principal, said in an email.
Meanwhile, the city of Sugar Land’s 2018 comprehensive plan outlined regional and neighborhood activity centers, where existing commercial areas such as the former Fluor Daniel building and the Imperial Sugar district can be redeveloped into walkable mixed-use areas outfitted with business, entertainment and residential spaces.
Ruth Lomher, Sugar Land assistant director of planning and development services, said city officials believe the centers will bring residents closer to services and businesses, limit traffic congestion, and promote interactivity.
“All of that has a positive impact on us as a community, as a city, because when our residents are happy, then you will know we can be a place that people want to be,” she said.
The comprehensive plan also provides a ratio of 88% single-family housing to 12% of multifamily housing across the city, although the plan states re-evaluation could happen.
When the city approved The Pearl development in May 2023, Community Impact reported the city would have room for 450 more multifamily units before surpassing the 12% ratio. This included multifamily units built as part of the Imperial Sugar District’s Char House project.
Sugar Land Communications Director Doug Adolph said he doesn't know the city's multifamily unit percentage remaining but that no apartments have been built or approved by City Council since The Pearl.Looking ahead
Sugar Land is exploring middle housing such as townhomes or duplexes to attract younger professionals and families as the city’s population ages, Lomher said.
Meanwhile, Missouri City officials will determine by early 2025 whether to revise or overhaul the city’s 2017 comprehensive plan, Gomez said. The process kicked off at a June 25 meeting, where officials shared their priorities regarding a new vision for vacant land and key corridors.
Future aspects of the input gathering will include city officials, stakeholders and residents.
Cassandra Jenkins contributed to the report.
