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Top 10 Cities with Soaring Multifamily Housing Expenses

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As of early 2024, the multifamily housing sector is witnessing a significant increase in operational costs, although the pace of growth has somewhat moderated. Notably, insurance premiums have surged, particularly in regions frequently affected by natural disasters.

In Spokane, Washington, multifamily housing expenses have escalated more sharply than in any other U.S. metropolitan area over the last year. According to the latest report by Yardi Matrix, the average operating cost per multifamily unit has risen by 7.1% year-over-year as of January, reaching $8,950. The most substantial increase was observed in property insurance premiums, which spiked by 27.7%, followed by marketing costs at 12.3%, administrative expenses at 9.6%, and maintenance and repair costs at 8.8%. Since 2018, insurance costs alone have ballooned by 129%, averaging $636 per unit.

Despite these rising costs, the sector has seen a net gain in profitability. Over the past 12 months, the average annual gross income per unit increased by $1,056, while expenses went up by $593, resulting in a $463 boost in net operating income for housing providers.


YoY Change in Expenses

Spokane, Washington


Tallahassee, Florida


Lafayette, Louisiana


Portland, Maine


Pensacola, Florida


Huntsville, Alabama


Savannah-Hilton Head, Georgia-South Carolina


Southwest Florida Coast


Tampa, Florida


Reno, Nevada


Source: Yardi Matrix

Regional Housing Expenses: Trends and Implications

The trend of increasing expenses isn't uniform but is particularly pronounced in certain regions. Yardi's analysis of 129 markets shows that nearly all witnessed a rise in expenses by at least 5%, and 28 markets saw increases exceeding 10%. Spokane led these statistics with an 18.9% increase. Other notable cities with significant expense growth included Tallahassee, Florida, and Lafayette, Louisiana, with nearly identical increases of 18.8% and 18.1%, respectively.

Insurance costs have seen remarkable hikes, especially in the Southeast U.S., a trend partly driven by regional legislation facilitating legal actions against insurers. This is particularly evident in Florida, where four of the five markets with the highest insurance premium increases are located.


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Future Outlook on Rents and Profitability

In the face of rising operational costs in the multifamily housing sector, there's a significant silver lining that can inspire confidence among owners and operators. While some markets have seen expenses swell, the overall increase in net operating income underscores a resilient industry capable of absorbing and adapting to these changes.

Despite the uptick in expenses, particularly in insurance and maintenance, operators can overcome these challenges by using a variety of strategies to ensure that profitability is not just maintained, but also enhanced. One key approach is the implementation of AI and other efficiency-boosting technologies. By investing in AI property management software, for instance, operators can streamline administrative tasks, cutting down on time and labor costs.

Additionally, there's room for innovation in energy management. By retrofitting properties with energy-efficient appliances and systems, owners can also significantly reduce utility expenses. These green improvements not only attract eco-conscious renters willing to pay a premium, but also often qualify for tax credits, further improving the bottom line.

Another strategy is to fine-tune the amenities offered. Aligning with the most current trends and tenant preferences can allow for rental premiums while ensuring high occupancy rates. Furthermore, proactive maintenance can prevent the ballooning of repair costs down the line, maintaining property values and reducing overall expenses.

The fundamentals remain the same despite these challenges, and that is simply that multifamily housing remains a robust sector with a strong demand base. The net gain in profitability, despite higher costs, demonstrates that the industry possesses inherent strengths, such as the ability to command higher rents due to sustained demand.

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Final Thoughts

While the current landscape does present challenges, the multifamily housing sector is far from reaching a standstill. By leveraging technology, sustainable practices, and strategic amenities management, owners and operators can navigate the terrain of rising costs and continue to thrive. The emphasis on intelligent investments and operational efficiency will not only counterbalance the increased expenses but can also pave the way for even greater returns and maximized profits in the foreseeable future.

As always, Be Bold, Be Great, and Keep Pushing Forward!

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P.S. If one of your priorities, like mine, is building and preserving your wealth through multifamily real estate investments, click here to download my new eBook: The Ultimate Guide to Creating & Preserving Your Wealth.


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About Ellie Perlman

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Ellie Perlman is the founder of Blue Lake Capital, a commercial real estate investment firm specializing in multifamily investing throughout the United States. At Blue Lake Capital, Ellie partners with both institutional and individual investors to grow their wealth by achieving double-digit returns by investing alongside her in exclusive multifamily deals they usually don't have access to.

A defining factor of Blue Lake Capital’s strategy is founded in utilizing machine learning/artificial intelligence throughout the course of all acquisitions and asset management. This advanced technology enables the company to produce accurate and data-driven forecasting for all assets on a market, property, and even tenant basis. In doing so, Blue Lake is able to lead commercial investments with the full capabilities of today’s technology.

Ellie is the founding host of REady2Scale, a podcast that highlights the assets, processes, and strategies for the multiple approaches to successful real estate investing.

She started her career as a commercial real estate lawyer, leading real estate transactions for one of Israel’s leading development companies. Later, as a property manager for Israel’s largest energy company, she oversaw properties worth over $100MM. Additionally, Ellie is an experienced entrepreneur who helped build and scale companies by improving their business operations.

Ellie holds a Masters in Law from Bar-Ilan University in Israel and an MBA from MIT Sloan School of Management.

You can read more about Blue Lake Capital and Ellie Perlman at

*The content provided on this website, including all downloadable resources, is for informational purposes only and should not be interpreted as financial advice. Furthermore, this material does not constitute an offer to sell or a solicitation of an offer to buy any securities.


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