From Feasibility to Inventory: A Predictive Framework for Multifamily Supply Analysis

Abstract

This thesis introduces a predictive framework for multifamily supply analysis by reversing the conventional sequence, moving from feasibility to inventory rather than inventory to feasibility. Traditional supply metrics rely heavily on delivered units, active pipeline counts, and historical absorption, all of which describe supply after developers have already made their decision to build. This backward-looking approach obscures the underlying conditions that actually determine whether new inventory will be built. This thesis proposes a model that begins instead with the economics of development feasibility, incorporating construction costs, achievable rents, capitalization rates, and the spread from YOC to Cap Rates that developers typically require for new projects to proceed. By estimating the rent levels necessary for a hypothetical development to achieve this spread— and comparing those requirements to current and projected market rents—the framework identifies where new supply is financially viable, where it is marginal, and where it is economically impossible. By anchoring supply forecasting in the feasibility thresholds that guide developer behavior, this approach transforms supply-side analysis into a forward-looking tool capable of predicting future inventory expansion with greater accuracy and insight than pipeline data alone.