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The falloffs came fast and hard across the board last year.

In 2007, Hunt Building Co. built 9,366 units of rental housing, landing the El Paso, Texas–based firm squarely in the No. 2 spot on Builder’s sister publication Multifamily Executive’s top 50 multifamily builders list that year. This year, it will take the No. 3 spot, with its 2008 starts plummeting almost 63 percent to 3,476. Lane Co., based in Atlanta, was No. 7 in 2007 with 4,367 units started, but saw a whopping 88 percent drop to 522 in its 2008 unit count. It is now coming in at No. 47. Even the No. 1 multifamily builder in the country—Dallas-based Trammell Crow Residential—saw its starts fall 25 percent from 10,936 units in 2007 to 8,194 last year.

Yes, 2008 was a tough year. All in all, only 15 companies on this year’s list saw their starts go up in 2008. The core of the problem? After the Wall Street meltdown and subsequent stiffening of credit requirements, new lending came to a halt by early fall of 2008. The problem escalated when lenders effectively left developers stranded at the altar—changing terms at the last minute or simply pulling the loan—at the close of 2008, says John A. Schaffer, CFO of Contravest, a Lake Mary, Fla.–based company that started 866 units in 2008, landing it in the No. 38 spot this year.

“A lot of lenders have been out of the game for 60, 90, or 180 days,” Schaffer says. “[Just] when you think everything is fine, they’re getting the word out at the last minute that, as a corporation, they’re pulling the plug on any new financing nationwide.”

But that’s not the only concern. Even if the lending spigots were turned on, apartment developers are still uncertain as to who will live in those new apartments after they open for lease-up. With the continued slowdown in the economy, leasing after new construction is becoming even more difficult.

“We don’t want to start new development at the moment until we have more clarity on the economy,” says David Stockert, president and CEO of Post Properties, whose Atlanta-based REIT saw a drastic falloff in starts, going from 1,131 in 2007 to 147 in 2008. “You’ll have very little supply being produced over the next 12 to 18 months. I’m assuming that in 2009 people will be hunkering down, and maybe you will start to see things loosen up in 2010.”

Stockert isn’t alone in that sentiment. Almost every company on this year’s top 50 list expects its starts to fall further in 2009. And, in some cases, the decline will be drastic. Birmingham, Ala.–based Colonial Property Trust started 742 units in 2008. But in 2009, the REIT expects to start nothing. Trammell Crow Residential only expects to start 2,000 units—after nearly 11,000 units started two years ago.

“2009 is going to make 2008 look like a cake walk,” says Donald Phillips, owner and managing director of Phillips Development and Realty, a Tampa, Fla.–based builder that started 2,430 units in 2008, taking the No. 11 spot on the list.

To deal with the downturn, developers are making all sorts of changes. Many companies, such as JPI of Las Colinas, Texas, have been forced to downsize to stay afloat. The company sold its management services division to Charleston, S.C.–based Greystar Real Estate Partners and its JPI Resident Solutions team of multifamily technology advisors to RealPage, a Carrollton, Texas–based multifamily technology products and services provider.

Lane Co. jettisoned former CEO Bill Donges and brought back the company’s founder. Many others, such as San ­Francisco–based BRE Properties, announced sweeping layoffs. Colson and Colson in Salem, Ore.—traditionally a top 10 company—declined to participate in this year’s list and continues to remain mum about its financial health. Miami-based The Related Cos., the builder of flashy South Beach high-rises during the height of the boom, also chose not to participate this year.

Even firms such as Contravest, which is seemingly well situated with existing equity partners, have had to make tough choices. The company has laid off workers, cut salaries, ­reduced benefits, and consolidated office space. Development personnel who remain with the company have had their responsibilities shifted to other departments within the organization, such as property management, to keep them busy.

In Schaffer’s words: “Going forward, we’re [looking at] cash flow to try to make smart decisions today to keep as much cash on hand as possible to weather the next two years.”