Multi family housing makes it more affordable? All of Oregon’s Cities over 100k make the list for their size in new construction.
New housing construction in the U.S. is slowing down, which isn’t good for families already struggling to afford their first home. Even though multi-family dwellings have accounted for the lion’s share of new home construction growth since the recession, the shift away from single-family homes has failed to lower prices. Data from the Department of Housing and Urban Development shows that the median sale price for new homes in the U.S. reached a record high of $348,200 at the start of 2020.
To find which metropolitan areas are investing the most in new housing, researchers at Construction Coverage analyzed building permit data from the U.S. Census Bureau and home price data from Zillow. For each metro, the researchers calculated the number of new housing units per 10,000 residents. They also looked at the share of new housing units that are multi-family, the total value of new home construction, the median home value, and the five-year population growth. Only metros with at least 100,000 residents were included. Additionally, metros were grouped into cohorts based on population size: large metros (1,000,000 residents or more), midsize metros (350,000-999,999 residents), and small metros (less than 350,000 residents).
How does Oregon Compare?
Salem-Keizer area ranked 46th for “Midsize Metros”. With 1,522 new units valued at $295 Million, an average home price of $296,019, and a population increase of 7.9%. That’s with data prior to the post-pandemic building. The central Willamette Valley could have moved up even more by now. The Eugene area ranked 56th.
The Portland-Vancouver-Hillsboro, OR-WA ranked twelfth in Major Metros in the U.S. with New housing units per 10k at 67.6, 16,756 new housing units with 54.4% multi-family, a Median home value of $412,306, 5-year population growth of 7.1%, and the total value of new housing units (millions) of about $3,347.
For Small Cities Bend ranked 10th, Albany-Lebanon was at 34th, and Medford was sitting at 80th nationally.
Across all metros, there is no correlation between the home price and the proportion of multi-family home construction. However, looking only at metropolitan areas with over 1 million residents, there is a loose positive correlation. As a result of space constraints and skyrocketing prices for single-family homes, America’s largest and most expensive metros such as Los Angeles, New York, Boston, San Francisco, and Seattle are investing heavily in multi-family dwellings.
Statistics on new housing units and new housing unit valuation are from the U.S. Census Bureau Building Permits Survey. The survey includes new single- and multi-unit housing projects authorized by building permits at the metropolitan, state, and national levels. This analysis used annual data from 2019—the most recent full year available.
For each metropolitan area, the number of new housing units was divided by the total resident population to yield the new housing units per 10,000 residents statistic. This statistic was used to rank the metros. In the event of a tie, the location with the larger number of total new housing units was ranked higher.
Home values are average annual values from the Zillow Home Value Index. Population data is from the U.S. Census Bureau 2018 American Community Survey 1-Year Estimates. The population change was calculated between 2013 and 2018 (the most recent data available).