Thanks to Stephen Smith, I recently ran across an interesting database: HUD data on building permits by municipality. So I decided to find the number of permits per 1,000 for a wide variety of cities, focusing on (1) multifamily permits (because rising rent is a bigger problem in most places than rising home costs) and (2) during 2015 and 2016 (because isn’t two years of data always better than one?). Here’s what I found for the places I bothered to look up:
Growing high cost cities
permits per 1000/mean price for units with 5 or more structures in thousands
Seattle 29.4
Denver 19.5
Washington 13.7
Boston 12.5
Portland 12.2
Brooklyn 11.5
Manhattan 10.1
San Francisco 8.8
San Diego 7.6
Los Angeles 6.7
Growing low cost cities
Atlanta 28.7
Dallas 15.3
Nashville 14.6
Austin 13.2 (not sure whether this counts as a low-cost city- really its kind of borderline)
Charlotte 12
Columbus 7.4
Houston 6.8
Indianapolis 2.3
Low demand (i.e. declining) cities
Chicago 5.4
St. Louis 3.6
Cincinnati 2.3
Milwaukee 2.2
Baltimore 2.1
Detroit 1.4
Another fun fact: suburbs of expensive cities lagged behind even the low-demand cities. Nassau and Suffolk Counties had 0.3 and 0.2 multifamily permits per 1000 respectively, Marin County outside San Francisco 0.7, Orange County outside Los Angeles 4.7.
Some takeaways: 1. Low-demand cities generally had less building than even the most restrictive cities.
2. Within the high-cost city group, it seems to me that there is a strong correlation between permits and prices: Seattle and Denver are certainly cheaper than San Francisco or Los Angeles.
3. On the other hand, there were some low-cost cities that didn’t have a lot of new construction, like Houston and Indianapolis. But this weirdness can be explained away by looking at new single-family construction: Houston had more than half as many new single-family permits as multifamily (9273 to 15475) as did Indianapolis (1515 single, 2017 multi) while Atlanta had eight times as many multi-family (1615 to 13,113) and Dallas had more than six times as many multifamily (3080 to 20,429). Where land is plentiful enough, some people buy instead of rent, creating demand for single-family housing.
4. All of this is subject to one big caveat: this data gives us permits, not actual construction. In 2015, New York City had four times as many permits as certificates of occupancy. I do not know whether this is typical.
Houston was also probably hit by local economic conditions because of the oil price slump.
I don’t know how comparable this data is, but for for Vancouver 2016, per this document, (http://vancouver.ca/files/cov/statement-of-building-permits-issued-december-2016.pdf and the Canadian 2016 Census (https://censusmapper.ca/maps/591#9/49.2479/-123.1763)
That there were 11.8 units permitted per thousand population in 2016 and 12.4 in 2015,
2015 was not a typical year for NYC permits. There was a huge spike in permits due to the expiration of 421a, a tax abatement program. Buildings that had their foundation permits by the expiration date were grandfathered in.
permits per 1000/mean price for units with 5 or more structures in thousands
Would someone explain what this means? I take it to mean: number of permits per 1000 per mean price for units with 5 or more structures in thousands. But what does that mean?