Supply Constrained Markets

Summer 2010, Vol. 35, No. 2
Abstract: Constraints on new supply in a given market reduce an owner’s competition for tenants, which typically leads to higher occupancy, higher rent levels and faster rent growth. Supply constraints can stem from several sources and vary across both markets and time. This article discusses several aspects of supply constraints, including their origin and economics, and introduces a way of measuring this feature across property sectors and metropolitan areas.