New data from a national Apartment List analysis suggest that the Washington area is adding enough housing stock to accommodate demand.
From 2010-20, the Washington metropolitan area added 181,000 new housing units, increasing the housing stock by 8 percent, according to the report, released June 8. During the same period, the region added 310,000 new jobs, up 11 percent.
“A healthy housing market should add a new housing unit for every 1-2 new jobs as the local economy grows,” the analysts noted. “In D.C., 1.7 jobs have been added for every new housing unit, indicating that the area is building sufficient new housing to keep pace with demand.”
(The analysis was conducted by Rob Warnock, Chris Salviati and Igor Popove of Apartment List. The full report can be found at https://bit.ly/34Ylyou.)
Within the D.C. metro, Loudoun County saw the fastest growth in housing units, with an increase of 30 percent. Manassas Park city built the least new housing, with its overall stock declining 1 percent.
According to recently-released data from the Census Bureau, the United States added more than 9 million net new housing units from 2010 to 2020, expanding the nation’s housing inventory by 6.9 percent.
“Growth in new housing, however, varies dramatically by region. While some major markets are building enough to keep up with demand, many of the most sought-after metros are severely underbuilding,” the analysts noted. “If the supply of new homes cannot keep up with that influx, the homes that do exist will become prohibitively expensive, especially for lower-wage households.”
States that expanded their housing stock the fastest over the decade were:
• North Dakota (+20 percent): Rapid growth in North Dakota was driven by an oil boom in the earlier half of this decade, which brought thousands of new residents to a sparsely populated region, spurring demand for new housing. Western North Dakota is home to the nation’s two counties where housing inventory grew fastest, McKenzie (+125 percent) and Williams (+88 percent), while there are several other surrounding counties that grew faster than the national average.
• Utah (+19 percent): The Beehive State ranks second thanks to strong housing construction throughout the broad Salt Lake City region. Salt Lake County itself expanded its housing supply by 15.6 percent, yet still ranks 12th in the state. Even faster growth occurred in surrounding counties like Wasach (+40 percent), Utah (+30 percent), and Morgan (+27 percent). There is also a pocket of growth in the southwestern corner of the state, centered around the city of St. George; housing stock in Washington and Iron counties grew 35 and 17 percent, respectively.
• Texas (+15 percent): Texas expanded its housing inventory with rapid construction in the suburban areas surrounding its major metropolitan regions, a trend mirrored in other large markets. Dense pockets of growth can be seen around the Dallas and Houston metros, and along the corridor between Austin and San Antonio. The Texas county that saw the fastest growth this decade is Hays (+48 percent) just south of Austin.
Focusing on just the nation’s 100 largest metropolitan areas, the Provo (Utah) metro boasts the quickest housing growth (+30 percent this decade). Four Texas metros can be found in the Top 10: Austin (+29 percent), Houston (+20 percent), McAllen (+18 percent), and Dallas (+18 percent).
Raleigh and Nashville rank third and sixth, respectively, among markets that emerged over the past decade as increasingly popular alternatives to established, expensive innovation hubs. Boise, where rent prices have been growing faster than anywhere else in the country, has also built homes quickly, growing its housing inventory by more than 22 percent over the past decade.
“When we zero in on the metros that have built the least new housing relative to jobs added, two distinct groups emerge,” analysts noted. “One is comprised of expensive, housing-constrained coastal markets: the San Francisco Bay area (5.9 new jobs per new housing unit); various Southern California metros, including Riverside (4.4) and Los Angeles (4.2); Miami (4.4); and New York City (4.2). These are metros that have become synonymous with the ‘affordability crisis’ – in part because they have added high-wage jobs much faster than they have added new housing.”
The second group includes Rust Belt metros that dominate the list, occupying seven of the top 10 spots.
At the very top is the Detroit metro, where the number of jobs grew 18 percent this decade but the number of housing units grew just 2 percent. After Detroit comes a trio of Ohio metros: Dayton (7.2 jobs-per-unit), Toledo (7.0) and Cleveland (6.9) and further down the list are metros in Illinois, Michigan and Pennsylvania.
Analysts say it would be inaccurate to contend that this second group is failing to build enough housing. The Rust Belt was hit particularly hard by the 2008-09 recession, so at the start of the decade these metros had an excess of vacant housing. Since 2010, as jobs and workers have come back to these Midwestern markets, there were abundant housing options waiting for them even in the absence of new construction.)
On the other end of the spectrum – stretching across the Mountain West, Sun Belt, and South Atlantic – are metros that have achieved a healthy jobs-to-homes ratio. This includes, in addition to the Washington area, a handful of the nation’s largest metropolitan centers, including Houston (1.2 new jobs per new home) and Dallas (1.8), as well as many smaller metros such as Tucson (1.1), Nashville (1.8), and all five of the largest cities in North Carolina.
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