Home Building Patterns in Metropolitan Areas

W99-9: The level of new housing construction activity in large American cities – as measured in numbers and share of building permits – has been rising since the recession of the early 1990s, and as of 1998 has almost caught up with the peak of the real estate boom in 1986. The gains in metropolitan-area homebuilding are distributed unevenly: half of the large cities in the 39 largest metropolitan areas had a smaller portion of all the permits issued in their metropolitan area in 1986 than in 1998, while just over a quarter gained a greater share of permits. The great majority of new homes are built outside the urban core in suburban and exurban locales. In general, compact, densely developed cities are constructing much less housing than spacious cities that include substantial amounts of undeveloped land. Only two compact cities, Seattle and Orlando, issued more than 1000 permits and had more than 10 percent of all permits issued in their metropolitan areas in 1998. A comparison of the 39 large cities by their land size shows which cities, by 1998, had “hot” and “cold” housing construction markets. The hot markets are: Seattle, Orlando, Boston, Miami, Columbus (OH), Portland (OR), Tampa, New York, San Francisco, San Antonio, Phoenix, Houston, and Dallas. The cold markets are: Baltimore, Providence, St. Louis, Sacramento, Detroit, Philadelphia, New Orleans, Chicago, Kansas City, and Los Angeles…