How ‘5-over-1’ Construction Is Plaguing America: For Better or Worse
American urban skylines are undergoing a transformation characterized by a surge of standardized apartment complexes replacing historical architectural aesthetics. This is the hallmark of the ‘5-over-1’ construction boom, a trend of new residential apartment buildings flooding US cities. ‘5-over-1’ refers to mid-rise buildings with five stories of wood framing atop a one-story concrete base, or podium, typically designated for residential and retail amenities. The expanding presence of this construction formula in urban landscapes is a direct result of the economic pressures the multi-family housing market is currently facing. Real estate developers live by two rules: maximize rentable square footage and minimize construction costs, making the ‘5-over-1’ construction formula a developer's sweet spot. Despite developers using this formula to cost-effectively shrink the ongoing housing shortage in the United States, this new construction phenomenon brings implications for rising rent costs, displacement, and aesthetic monotony, ultimately leading to an evaluation of whether the benefits of this construction model surpass its perceived detriments.
The rise of ‘5-over-1’ construction is just the latest chapter in a long history of real estate trends reshaping American landscapes. Beginning in 1908, Sears, Roebuck, and Co., an American chain of department stores, offered the Sears Modern Home Program, a catalog that enabled prospective homeowners to mail-order houses. Customers could select from over 447 designs with a range of architectural styles, order blueprints, send in a check, and a few weeks later, everything they needed to build the home would arrive in a train car. Sears would go on to ship over 75,000 homes across the country between 1908 and 1940 (Rosenberg 2021). Much like ‘5-over-1’ construction, both of these real estate marvels relied on standardization and mass production. However, Sears homes were known for their quality materials and architectural diversity; more than 50,000 still stand today (Parry & Gordon 2018), a stark contrast to the perceived deficiencies of '5-over-1' construction. ‘McMansions,’ a slang term describing large, seemingly luxurious, mass-produced homes known for their cookie-cutter designs and poor quality, dominated American landscapes from the 1980s until the Great Recession in 2008 (Kagan 2025). Real estate developers capitalized on the ‘McMansion’ boom due to their relatively low construction costs and high profit margins. Home Buyers in this era benefited from subprime mortgages, fueling demand and artificially inflating affordability. Eventually, as the housing supply exceeded demand and rising subprime mortgage rates triggered defaults, the US housing market collapsed, leading to plummeting prices, widespread foreclosures, and developer bankruptcies. The housing market collapse prompted a significant shift in developer strategy, with a growing number of real estate developers prioritizing rental housing over homeownership. As the risks of constructing single-family homes were exposed, developers sought more consistent revenue streams and lower-risk ventures. Similarly, ‘5-over-1’ construction prioritizes cost-effective development through standardized designs and cheap construction costs while catering to the current housing shortage in the United States. With the national homeownership rate expected to decline over the next few decades and a larger share of the population becoming renters, developers are drawn to construct multi-family rental properties over selling single-family homes (Young, Zinn & Choi 2023).
Every real estate trend throughout American history addresses one thing: housing demand. The United States has experienced a long-term trend of urbanization, and to address these growing urban populations during a period of rising construction costs, building codes have adapted to favor more affordable construction methods. In 2010, while the housing market was still in turmoil, the US International Building Code (IBC) was revised to allow wood frames for buildings up to a height of five stories (Dorrell 2023). This revision, driven by advancements in engineered wood products offering enhanced strength and fire resistance, enabled developers to significantly reduce construction costs by substituting wood for steel or concrete in mid-rise buildings. Furthermore, the code change facilitated increased vertical density by allowing taller buildings on the same land footprint—maximizing developers’ rentable square footage. While the altered building code may have been intended to reduce developers' initial construction costs, overall expenses continue to rise, ultimately pushing rental costs higher for consumers.
In the last 15 years, rising rents in the United States have been reflected by substantial increases in the land and materials costs of construction. Local and state governments have adopted impact fees and complex permitting processes, increasing development costs while extending construction timelines (Hoyt and Schuetz 2020). As engineered wood products gain popularity in the construction of ‘5-over-1’ buildings, developers face higher material costs due to the surge in demand. Government-imposed development costs and rising material prices are typically reflected in higher rents for tenants. As land costs have increased, developers have sought to increase housing density on a single land parcel. Today, over 60% of new multifamily units completed in 2018 were in buildings with more than 50 units, while only 5% were in buildings with under 10 units. Increasingly dense buildings reflect economies of scale in multifamily construction. The design, regulation, and operation costs of these high-density buildings do not vary significantly by size, allowing developers to spread the hard costs over more units through larger buildings. (Hoyt and Schuetz 2020). Despite the increasing supply of multi-family housing, including the construction of 114,346 units in 2021 by 25 of the largest multi-family housing developers in the United States (NMHC 2022), the US housing market remained 4.9 million units short in 2023 (Patel, Rajan, & Tomeh 2024), reflecting a long-run housing shortage that is keeping rent prices high as demand persists.
It should be noted that construction companies are working towards reducing the current national housing shortage in the US. However, even with the formula theoretically creating a feasible method for building affordable housing, the reality has often been the opposite. This is true for most populous cities in the US. For example, if you look at apartments for rent in Columbus, Ohio, ‘5-over-1’ apartments dominate the search results, with rental prices ranging from $1,100 to $5,000 a month (Dorrell 2023). In most cases, these buildings are typically labeled as “luxury” apartments, despite their cost-effective formulaic floorplans and cheap building materials. Further complicating affordability, affordable housing developments are subsidized by federal programs that often create additional cost pressures. For example, the Low-Income Housing Tax Credit (LIHTC) has additional constraints that increase development costs relative to market-rate housing. LIHTC-funded new construction projects have significantly outpaced inflation, meaning that more public subsidy dollars are building fewer and fewer affordable units (Reid 2020). Notably, affordable housing developers are often limited to purchasing the cheaper, least desired land parcels that cost less due to the challenges of building on them; for example, steep sites that require more expensive foundations or contaminated land that requires remediation (Hoyt and Schuetz 2020). Coupling these increased costs for affordable housing developments with the increase in general construction costs for new multi-family housing, the headwinds for constructing affordable housing have never been greater, exacerbating the housing affordability crisis.
The 12 South neighborhood of Nashville used to be home to Black churches that were central to the neighborhood’s culture until new development intensified in the area, causing housing prices to rise and forcing church members to relocate, leaving many of the churches no choice but to leave as well. Calvin C. Barlow Jr, 72, a bishop at Second Missionary Baptist Church in Nashville, sold his church in 2021 to a developer and moved to a new location on the outskirts of town. Today, in that same neighborhood, one can find ‘5-over-1’ buildings accommodating retail amenities such as upscale restaurants and boutique clothing stores. Barlow argued that the city loses when its people are pushed out, the culture of the neighborhood vanishes, and the pivotal resources that his church offered to the people of his community disappear (Kode 2023).
Although the ‘5-over-1’ construction model has contributed to the displacement of long-time residents, it has also delivered much-needed housing for vulnerable populations. Urban Housing Solutions, a Nashville nonprofit organization, looks to provide the city with 1,000 apartments over the next five years using the ‘5-over-1’ construction formula. They have helped low-income locals like Rosalie Holder, 71, who after several close encounters with street violence compelled her to search for a new home. Through Urban Housing Solutions, she lives in a ‘5-over-1’ building paying $240 a month—far below market rate (Kode 2023).
Ultimately, the ‘5-over-1’ construction formula highlights the urgent need for a more nuanced approach to development—an approach that prioritizes both increasing the housing supply and genuine affordability while ensuring that the benefits of new multifamily housing developments are shared equitably across all communities.
To address the housing shortage and meet rising demand, developers are saturating urban landscapes with homogenous ‘5-over-1’ buildings. More specifically, about 87% of the country’s multifamily construction used wood framing in 2015 (Slowey 2016). This trend, which is increasingly undifferentiated in American cities, is rooted in the pure economics of minimizing costs and maximizing profits. Standardized architecture is cheap, while quality design is considered an unaffordable luxury. Scott Black, a senior vice president of a development firm that builds these apartments across the Southeast, argues that companies like his work with thin profit margins and that variation is costly. Units are made to a standard size, repeated a few times per floor, maximized to create rentable space, and then the domino effect toward generic architecture is established. Wood frame construction often uses easy-to-install flat windows through a process called rain-screen cladding in order to create the casing of the building combined with Hardie panels, an exterior covering made from fiber cement (Sisson 2018). Hardie panels are the exterior of choice for cost-conscious developers, as metal sliding, the upgraded counterpart, costs roughly triple the amount. The widespread use of this cost-efficient formula in wood-frame construction leads to a homogenization of new multi-family housing across the US while sacrificing regional architectural aesthetics.
If this continues, American cities are destined to lose their unique charm and play a bigger role in one's mental health. Thoughtful design choices and personalization foster spaces that support emotional balance and mental clarity, allowing aesthetic architecture to promote environments that enhance happiness, productivity, and connection (Sen 2024). Unfortunately, the current emphasis on profit in multi-family housing developments comes at the expense of aesthetics, missing a critical opportunity to make a more beautiful nation. Instead, developers have chosen to erode the unique personalities of American cities with cheap wood-frame construction.
It is hard to tell whether ‘5-over-1’ construction buildings are built to last in the long run. Ken Bland, Vice President of Codes and Regulations at the American Wood Council, argues that durability shouldn’t be an issue regarding wood-frame construction because when properly detailed, it will last as long as its steel or concrete counterpart (Slowey 2016). When the wood framing is not properly detailed the building will become more susceptible to water damage. Wood-frame construction also often results in poor acoustics, with residents of these buildings frequently complaining about thin walls and excessive noise transmission, a predictable outcome when developers prioritize cost-effective materials. However, with the current national housing shortage, those who inhabit these buildings could be considered lucky.
Ultimately, moving beyond the profit-driven approach of the ‘5-over-1’ model will require a multifaceted strategy, including incentivizing truly affordable housing through robust public funding and policy reforms while empowering local communities to shape development that reflects the social fabric of their city. In order to shift away from the undifferentiated development we see today, the future may necessitate a reevaluation of building codes and developer incentives to encourage greater architectural diversity. A bright spot in this current housing environment is that, despite inadvertently contributing to rising rents, developers are actively working to reduce the U.S. housing deficit. Yet, can these developers build America out of the housing crisis? Whether they can or not, they will look to keep playing by two rules using the ‘5-over-1’ formula: maximize rentable square footage and minimize construction costs. If only developers could prioritize architectural diversity at the same time, but at the moment, that isn’t financially feasible in our current economic climate. Meanwhile, American urban landscapes will continue to drastically change, for better or worse.
References
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