Permits v. Job Growth: Housing Development Lags Pre-Recession Peak
A new report from Apartment List found that, approved housing development nationwide lags 38 percent below its highest point before the recession. In Texas, Austin and Dallas both issued more permits than their pre-recession peaks, but Houston and San Antonio lag well behind their peaks.
The report says, “While most of these metros have built enough new housing to keep pace with strong job growth, they have done so primarily through continued single-family sprawl.”
In a healthy, balanced market, according to Apartment List, one new housing unit should be built for every one to two new jobs that are added, a market that adds more than two jobs her housing permit is considered “undersupplied.”
In Houston, they found that an average of 6.7 new housing units per 1,000 residents were permitted from 2008 to 2018. That ranks Houston #4 in permitting activity for the nation’s 50 largest metro areas. During this same period, the metro added 6.3 jobs for every 1,000 residents, ranking the area at #14. Apartment List argues that Houston may have an overabundance of new housing, but remember, most of these are single family housing units in the metro area, not necessarily located within city limits or near job centers.
The city itself is considered undersupplied, they found that for every permit issued, Houston saw 21.7 new jobs.
For every 1,000 residents, San Antonio saw an average of 3.7 new housing units and 7.5 jobs added from 2008 to 2018, according to Apartment List, making the city #18 out of the 50 largest metros.
In San Antonio, 2 jobs were added for every new housing unit showing that there’s a minor undersupply of new construction.
Dallas came in at #7 out of 50 for new housing construction.
On average, the metro area saw 5.9 new housing units and 8.3 jobs for every 1,000 residents. Roughly 1.4 jobs were added for every new housing unit, so the study found Dallas to have “a balance between supply and demand for new housing.”
Austin came in 1stout of 50 metros with 9.5 new housing units and 12.6 jobs per 1,000 residents. This is about 1.3 jobs for every new housing unit, which is also said to be a balance between supply and demand.
The report notes the reliance on single-family homes found in Sunbelt cities. Most of the growth in multifamily units, which is making up a greater share of the overall growth, is happening in already dense metro areas like New York, Boston, and San Francisco.
