I don’t have a strong enough since of the dynamics and limitations in mulit-family starts to give a really good answer. However, I want to suggest based on the historical data the answer is: pretty darn high.
Here is a comparison of mulit-family housing starts to single family
Obviously analysts used to looking at the last decade are used to using words like “tiny” to describe multi-family starts as a part of the total picture. However, it wasn’t always so.
Look at the 70s and to a lesser extent the 80s. Multi-family is a big contribution. Its even more impressive when you consider that a few hundred thousand single families are built by owner or custom contractor, meaning they are not for sale or rent.
Looking at the market for-sale and for-rent, multi-family has been almost strong in the past as single family.
Given the current shortage of multi-family, the growing shortage of units generally and the burn that Americans and banks still feel from single-family I don’t see a fundamental reason why we couldn’t have a multi-family based boom.
That implies that we could see on the order of 1 million multi-family starts in the next few years. Its to early to “call” that but the fundamentals seem ripe for it.