If you are planning to develop a multi-family building or invest in rental housing, knowing apartment construction costs is a crucial step. In 2025, the landscape for new builds continues to evolve, influenced by rising material prices, labor shortages, and shifting urban development patterns.
Apartment building cost is much more than just bricks and mortar. They include various variables. With the average cost to build an apartment ranging between $150 $400 per square foot, depending on size and region.
This article breaks down everything you need to know, from cost factors and regional variations to unit pricing, and ways to save so that you can approach your apartment construction project wisely.
Key Takeaways
Factors Influencing Construction Costs for Apartment
Not a single number determines the total cost to build an apartment complex. It is the result of different elements on the overall budget.
Land Acquisition
The cost of land can vary drastically by location. Urban cores tend to be more expensive, while suburban or rural sites may be cheaper but come with additional infrastructure costs.
Labor Costs
Skilled labor shortages, unionized trades, and local wage laws can drive up costs. In 2025, wage inflation continues to push labor expenses upward across the U.S.
Building Materials
The price of steel, concrete, lumber, and copper fluctuates with global supply chains. According to United States International Trade Commission, lumber prices saw volatility after 2020, and concrete costs continue to rise due to energy and transportation costs.
Permitting and Regulatory Compliance
Getting through city planning departments is not just time-consuming, it’s costly. Permit fees, environmental impact reports, and compliance with building codes all add to the bottom line.
Design Complexity
A simple, modular design is much cheaper to build than an architecturally complex, custom layout. The more angles, curves, and amenities involved, the higher the construction cost.
Location and Market Conditions
Where you build has a prominent impact on costs. In high-demand urban centers, land is more expensive, labor is in shorter supply, and stricter zoning laws may require costly design accommodations. By contrast, suburban or rural builds often see lower land costs but may incur higher infrastructure or transportation fees.
The build cost of 4 bedroom home in Australia provides you an unit pricing estimate.
Type of Apartment Building
The form and function of the apartment complex will need structural, material, and labor costs. A low-rise garden-style apartment is cheaper per unit than a high-rise luxury development.
Apartment types affecting costs:
- Low-rise (1–3 stories): Lower labor and equipment costs
- Mid-rise (4–7 stories): Steel framing, elevators, fireproofing needed
- High-rise (8+ stories): Requires extensive engineering and safety systems
- Luxury units: Add significant cost per square foot due to custom features
- Affordable housing: May benefit from subsidies but still requires full code compliance
Material
The materials used impact the construction budget, from structural steel to finishes. High-end or specialty materials increase both direct costs and installation labor. In 2025, material prices will remain volatile due to lingering supply chain instability and global demand.
Apartment Cost Per Unit
When planning an apartment construction project, one of the most practical ways to budget is to use cost-per-unit and cost-per-square-foot criteria. These metrics offer insight into how your project compares with industry norms and help forecast total expenses early in the development cycle.
This metric represents the average cost to build each apartment, including its share of common areas, structure, and shared systems (such as HVAC and plumbing). It is beneficial when comparing different projects or evaluating per-unit ROI.
- Basic mid-rise builds: $150,000 – $250,000 per unit
- Luxury apartments: $300,000 – $450,000+ per unit
- Affordable housing projects: $120,000 – $180,000 per unit (with subsidies)
The number of bedrooms, square footage per unit, and amenities such as balconies or in-unit laundry will directly influence this figure and the long-term value.
4-Unit Apartment Building Cost
Typically, it ranges from $600,000 to $1 million, depending on quality, location, and layout, or $150,000 to $250,000 per unit.
50-Unit Apartment Build Cost
A more commercial-scale development, typically priced at $8 million to $15 million+, or $160,000 to $300,000 per unit, depending on quality, amenities, and density.
10-Unit Apartment Complex Cost
Average cost falls between $1.5 million to $2.8 million, with some economies of scale in design and site work, often $145,000 to $230,000 per unit.
20-Unit Apartment Complex Cost
The estimated total cost ranges from $2.8 million to $5.5 million, depending on whether it is garden-style, mid-rise, or features amenities such as parking or elevators.
Guide on house building construction cost is here for you.
Build Cost Per Square Foot
This is the most widely used pricing model in the construction industry. It gives a clear idea of how dense, efficient, or high-end your build is. Number of floors, type of unit, onsite amenities, and quality of finishes and appliances affects its pricing.
Apartment Type | Cost per Sq. Ft |
Low-rise (1–3 stories) | $150 – $225 |
Mid-rise (4–7 stories) | $200 – $275 |
High-rise (8+ stories) | $275 – $400+ |
Cost Apartment Floors
The cost for 5-floor apartment, generally falls under mid-rise construction standards, requiring more advanced structural support, elevators, and safety systems. Expect $200 to $275 per sq. ft., or $200,000 to $350,000 per unit, depending on the region and complexity.
The higher floor price increases due to fireproofing regulations, load-bearing structure changes, elevator installation and ADA compliance, and HVAC system zoning.
Report on Higher Apartment‑Build Costs in California Compared to Texas
A new RAND Corporation report on KTLA 5 news finds that building multifamily housing in California costs about 2.3 times as much as in Texas and about 1.5 times as much as in Colorado.
Average municipal impact and development fees in California are about US $29,000 per unit, compared to US $1,000 or less in Texas.
In metropolitan regions, beyond typical cost drivers (land, labor, materials), California’s longer pre‑development and construction timelines add substantial cost. Projects in California took on average 22 months longer than in Texas.
The report notes that in the Bay Area, costs reach three times those in Texas in some cases.
Jason Ward, lead author and economist at RAND, says:
“California is significantly more expensive than both Colorado and Texas in every cost category that we examined.”
Dan Dunmoyer, President & CEO of the California Building Industry Association, remarks that the structural cost gap explains why housing prices in California remain elevated.
“If it takes three or four times as long and your fees are 29 times higher than in Texas, then you have to put that cost into the home.”
On the other hand, Carolia Reid, research advisor at the Terner Center for Housing Innovation (UC Berkeley), emphasises that higher costs also reflect California’s policy commitments.
“In my opinion, we also don’t want to be Texas.”
Simple Tips to Reduce Apartment Construction Costs
- Use modular or prefab construction to save time and labor.
- Simplify your building design to reduce material and labor complexity.
- Buy materials in bulk and lock in prices early.
- Avoid change orders by finalizing designs before construction starts.
- Use project management software to prevent delays and stay on schedule.
- Check for local incentives, such as tax credits or fast-track permitting.
- Plan early with estimators to avoid under-budgeting or surprises later.
Conclusion
Knowledge what draws apartment construction costs in 2025 is essential for developers, investors, and project managers aiming to build profitably and efficiently. From unit count and building type to location, materials, and labor, every decision influences your budget.
Whether you are building a 4-unit complex or a 50-unit mid-rise, strategic choices and local insight will keep your project on time and on budget, aligned with your investment goals.
