Thursday, September 20, 2018

Rising Percentage of Old Buildings in Cities Indicates Housing Construction Isn't Keeping Pace with Historical Trends

A new study by Apartment List finds that despite a current building boom most cities in the U.S. haven't been keeping up with historical rates of construction over the past decade. Across the U.S., 66% of the rental housing stock is over 30 years old, up from 41% in 1980. Meanwhile, less than 10% of the rental housing stock is 0-10 years old, down from over 20% in 1980.

In Portland, the share of rental housing units 0-10 years old went from 25% in 2000 to 10% in 2016. In Bend, the change was more dramatic - dropping from 34% to 10% over that same period. Eugene and Medford have also seen a decline in the share of new housing units.

As a result of the slowdown in housing construction compared with historical levels, older properties have seen the highest rates of rent growth since 2000. In the Portland Metro Area, rents for units built prior to 1960 increased 26% between 2000 and 2016. Meanwhile, rents for units built in the 1990s increased 12% during the same period. This indicates that the slowdown in construction is preventing the process of "filtering," where units become more affordable as they age.

In conclusion, Apartment List recommends removing local zoning barriers, innovating on the design end to build more affordable housing, and increasing public subsidies.  Read more.

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