The Role of Multi-Family Unit Construction in Addressing Urban Housing Challenges

The challenges of urban housing and the general real estate market across the USA and globally are complicated. Cities such as Chicago continue to become more densely populated as the number of new builds simultaneously declines. Lots, buildings, and land sit vacant, and the need for more supply raises the costs. Regarding urban housing, developers are dealing with limited space, high demand, and increased pressure to focus on affordability and convenience. Multi-family units address some of the challenges of developing housing in an urban landscape, and ETI Construction is the expert at multi-family properties in Chicago. 

multi-family units

A Brief Overview of Urban Housing Challenges

One of the biggest challenges when investing in multi-family properties, renovating, or building units is the lack of space. Urban areas are congested with people, infrastructure, and buildings. The lack of unused land that could be developed into housing is only part of the problem. There’s red tape: land-use regulations, property rights issues, and competing land uses complicating efforts to address urban housing needs. 

Additionally, land is only one of the challenges. As of the last census in 2020, over 16 million homes were considered vacant. The City of Chicago even has an online portal to check the status of vacant buildings. This definition is based on whether anyone lived at the address on April 1, 2020, so while data might be off, the national vacancy rate has mostly stayed the same over the last two decades. So there is space; it’s just unoccupied, uninhabitable, or caught up in other regulations and zoning issues. 

Another challenge includes the rapid urbanization that leads to gentrification, rising property values, and strains on infrastructure and utilities. Sometimes, an area can develop or redevelop too quickly without giving existing infrastructure and services such as transportation, water, and sanitation time to adjust to increased demand. This strain can hinder access to basic amenities and limit overall quality of life, even in brand-new multi-family units. 

The biggest issue to deal with while investing in multi-family properties is affordability. Housing costs across the country, especially in urban areas, often exceed what can be considered “affordable” for most residents. High demand and limited supply drive up prices, making it difficult for low- and middle-income individuals and families to find affordable housing. 

When remodeling or constructing new multi-family rentals, property owners and contractors need to balance quality, convenience, and location with affordability. 

Development of Multi-Family Apartments 

In the early 1800s, urbanization increased in the United States as industrialization drew people to cities. Even at this time, space was a concern. Developers began to build up, not out. Multi-story buildings, known as tenements, emerged in cities like New York and Boston to accommodate the growing population of workers. These tenements often lacked proper sanitation and ventilation and were associated with overcrowding and poor living conditions.

There was a shift in the late 19th century. Apartment buildings began to cater to middle and upper-class residents. In cities like New York, Chicago, and San Francisco, luxury apartment buildings featured amenities such as elevators, central heating, and ornate architectural details

Throughout the 1900s, apartment living gained popularity. Different types of apartments emerged, including walk-up buildings. Post-World War II, the expansion of suburban housing developments led to a relative plateau in constructing multi-family apartments and their popularity. By the end of the 1900s, there was a resurgence of urbanization, and more people headed toward the cities due to the opportunities, conveniences, and lifestyle. This increased desire for apartments led to increased investment in multi-family properties with the renovation and redevelopment of existing apartment buildings and the construction of new high-rise apartment complexes in urban centers.

Modern units include high-rise towers with hundreds of floors, townhouse-style complexes, condominiums, duplexes, mixed-use commercial and residential buildings, some with multi-family rentals, some with owned units, and some with both. 

multi-family rentals

Multi-Family Units Addressing Challenges 

What challenges of urban development can multi-family units address? Multi-family housing helps to improve affordability, increase the overall housing supply, encourage the development of public transit, foster diverse communities, improve environmental sustainability, and offer flexibility to residents. 


Multi-family units offer more affordable housing options compared to single-family homes. This is especially true in high-demand urban markets, such as Chicago, where land and housing costs are prohibitively expensive and space is limited. Building denser housing developments reduces construction costs per unit and offers lower rents or purchase prices to residents. 

Increased Housing Supply

Multi-family unit construction also helps to increase the overall affordability of housing by increasing the supply. In urban areas, demand often is much higher than the supply of livable homes. The National Association of Realtors even has a Housing Shortage Tracker to see where the supply does not reach the needs. Multi-family apartment buildings and even townhouses or condominiums accommodate a more significant number of residents within a smaller footprint of land, making efficient use of urban space.

Density and Public Transit

Higher population density has many advantages, including access to resources, economic opportunity, and diversity. It also supports the development of efficient public transportation systems. Transit-friendly developments reduce reliance on cars, promote walkability, and help alleviate traffic congestion and air pollution.

Inclusive Communities

Multi-family housing developments foster diverse and inclusive communities by bringing together residents from different socio-economic backgrounds, ages, and lifestyles. Mixed-income housing projects, in particular, promote socio-economic integration and reduce the concentration of poverty in specific neighborhoods, contributing to social cohesion and equity. Strategically built multi-family complexes can aid in limiting economic and racial segregation. 

Environmental Sustainability

Concentrating housing in multi-family units and building up, not out, can preserve the limited green spaces and agricultural land in urban areas. Developers and contractors can incorporate sustainable design features projects, such as energy-efficient appliances, green roofs, and on-site renewable energy generation, to minimize environmental impact and reduce residents’ utility costs. Multi-family units often lead to increased population density, which encourages the development of walkable areas and public transit, lowering carbon emissions. 

Flexibility and Adaptability

Multi-family housing offers flexibility. Units can accommodate renters and homeowners. Individuals who are not ready to commit to homeownership and those looking to own a unit but not worry about landscaping or general property maintenance can find housing in multi-family accommodations. Multi-family projects can offer flexible layouts, services, and features to accommodate various lifestyles. When someone does move out, contractors only need to make minor adjustments to make a unit perfect for someone else. 

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ETI and Multi-Family Developments

ETI Construction is the expert in multi-family rentals in the Chicago area. We’ve worked on projects ranging from 3-unit buildings to 60-unit buildings and entire condominium complexes. From new construction to complete renovations and restorations, we have the experience. Multi-family construction companies walk a tightrope between collaborations with stakeholders, trade professionals, designers, lawyers, and the city’s people who live around the building site. We are professionals at walking that tightrope. We are proud of our role in stimulating the local economy and carrying out construction to benefit your friends and neighbors.