MDUs: The Numbers Look Good, But It’s Too Soon to Tell

Construction of apartments in large, multiple-dwelling-unit (MDU) buildings by nongovernmental builders could set another record this year. Builders received more than 18,000 permits for MDUs with five dwelling units or more in 2021. The properties would contain 552,000 dwelling units, up from 532,000 in 2020. That’s great news for broadband deployers – MDUs are now almost always designed for fiber, and connecting an apartment is far less expensive than stringing fiber along streets and tying it to single-family homes through individual drops. New MDU construction has been the sweet spot for broadband deployments since the 1990s, specifically for fiber deployments. But only about half of new construction has used fiber since the technology became widely available 15 years ago. Now that is quickly changing. COVID-19 is the main reason. It directly brought more work, education, and even health care to many households. It also got federal subsidies, lower-cost deployment technology, cheap financing, and new municipal concern: resilience against future pandemics. Thus, even the least-technologically savvy developers have prioritized broadband since mid-2020. However, incomplete Census data and other related factors that may affect reporting on new MDU construction numbers clouds an accurate picture of broadband needs for MDU owners and managers. The best advice is for existing MDU owners and managers to survey the needs of their tenants and prospective tenants.