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ORLANDO, Fla. – Apartment dwellers could be facing double-digit rent increases in the coming years as a shortage of new multifamily units coupled with a rise in prime renter-age households gives landlords clout they haven’t seen since the mid-1990s, development experts said Thursday.

“Demand pressures are building. It’s not bad today because rents have been down the last two years,” said William McLaughlin, an executive vice president with AvalonBay Communities in the Northeast.

“But it feels a lot like 1992, when we were coming out of a deep recession . . . and we ended up seeing double-digit rent increases after that,” he said.

Multifamily developers broke ground on just 114,000 units in the United States in 2010, a figure so low that it wouldn’t account for all the multifamily units lost last year to the wrecking ball or natural disasters, David Crowe, chief economist for the National Association of Home Builders, said at the International Builders Show here.

Although expected to grow 16 percent to 133,000 starts in 2011, that would still leave a substantial deficit in units needed to meet expected demand.

Already there are signs the apartment market is tightening, and in some cities, rents are already going up 7 percent or 8 percent per year.

 

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