What's Happening?
The pace of urban residential infill projects is slowing, prompting calls for regulatory reform to revitalize this market segment. According to a report, the market share of apartment starts in large metro core counties has been on a downward trend, with a 12.3% decline in the second quarter of 2025 on a four-quarter year-over-year moving average. Medium and large-scale residential infill projects are now considered more financially risky due to a recent oversupply in many metropolitan areas. Regulatory adjustments, such as changes to parking requirements, permit and impact fees, and zoning/permitting rules, are suggested to stimulate development. The bipartisan Build HUBS Act aims to support housing construction near transit hubs by eliminating
some National Environmental Policy Act requirements for office-to-residential conversions and infill development.
Why It's Important?
Urban infill projects are crucial for sustainable city growth, offering a solution to housing shortages and urban sprawl. The slowdown in these projects could exacerbate housing affordability issues in densely populated areas. Regulatory reforms could lower development costs and encourage investment in urban areas, potentially leading to increased housing supply and more vibrant communities. The Build HUBS Act, if implemented, could facilitate the transformation of underutilized urban spaces into residential areas, improving access to housing near public transit and reducing reliance on cars.
What's Next?
The proposed regulatory changes and the Build HUBS Act will require legislative approval and support from local governments to be effective. Developers and urban planners will need to adapt to new regulations and market conditions. If successful, these reforms could lead to a resurgence in urban infill projects, providing more housing options in city centers. The impact on local economies and urban landscapes will depend on the speed and extent of these regulatory changes.
