Multifamily Housing

Multifamily housing is a term that has various meanings. Within the housing industry, multifamily housing is usually defined as properties that contain five or more units within the same building, sharing at least one common wall. Smaller two- and four-unit properties, which include multiple units that share at least one wall, are also considered multi-family housing even though they are excluded from the standard industry definition. There is also a misconception about what constitutes multifamily housing; multifamily housing is often thought of as synonymous with rental apartments. However, this [Page 490]form of housing includes a broad range of housing types designed to meet a variety of needs and income levels. Multifamily housing may be renter or owner occupied. Small and large apartment complexes are considered multifamily housing, as are duplexes, townhomes, and condominiums. The U.S. Census Bureau estimates that slightly over one quarter of all housing units in the United States are in buildings with two or more units. About half of all multifamily housing is located in buildings with nine units or less, including duplex houses, small apartment buildings, and townhomes. The other half of multi-family housing units in the United States are located within medium- and large-unit apartment, condominium, and town house developments.

Multifamily rental units are either considered market rate, where the rent paid is determined by the market, or affordable units, where renters pay a portion of the full value of the rent. Rent for affordable units is usually based on the household's income. The remaining portion of the rent is covered by a subsidy provided through a government or nonprofit housing program. Affordable rental housing is also known as subsidized or government-assisted housing. A few jurisdictions in the United States facing a shortage of affordable housing have regulated rents to stabilize the rents in multifamily properties. New York City and New Jersey are notable examples.

There are many advantages to living in multifamily housing. Whether owned or rented, multifamily housing typically offers its residents the freedom from the responsibility of home maintenance. For renters, it also offers ease of mobility. Because of its higher density, multifamily housing is often located near shopping, transit, and other amenities. Living in multifamily housing can also have its disadvantages. Residents of multifamily properties have less control over their living environment. Noise from adjacent units and hallways can be a problem. Property managers and community associations are able to place restrictions, including rules about parking, visitors, pets in the building, and use of common space, that interfere with residents’ sense of autonomy.