Page 24 - BB_Feb_2019_WEB

More Homes

Needed to Replace

Older Stock

Over the 40-year span from 1961 through 2000,
housing starts averaged a little over 1.5 million a
year, but they have been nowhere near that high
since 2006. As a recent NAHB study explains, one
outcome of this shortfall has been a tendency for
older homes to remain in service longer. Attempts
to improve the stock of housing in the U.S. (for
example, through new development standards
or building codes) therefore make relatively little
sense without a concomitant strategy to increase
overall production.
More than one industry expert has reported on
the production shortfall. In an April 2018 article, for
instance, Laurie Goodman of the Urban Institute
estimated that, in 2017, the supply of new homes Census Bureau uses to estimate the number of
fell about 350,000 short of the level needed to housing units in the U.S. are even smaller, showing
meet demand. Similarly, the NAHB study showed less than 1 housing unit per 1,000 being removed
that the number of homes completed has been from the stock per year in the Northeast and West
running below even the number of net new regions.
household formations. Whichever way you want In the long run, loss rates as small as this are
to look at it, this shortfall creates pressure to keep not sustainable, of course, as that would imply
older homes in service longer.
half of new homes built in some regions last 1,000
It should therefore not be surprising that data years. But in the medium term, it may be possible
from the Census Bureau’s American Community to keep removal and production rates as low
Survey show that the number of homes built as they are right now. As a thought experiment,
before 1970 has been declining at quite a slow consider what would happen were loss rates
pace. There were 52.83 million of them in 2014, to remain as currently estimated by the Census
and by 2016 the number had fallen only to 52.17 Bureau and 1.20 million new homes were built
million. every year (1.20 million homes were started and

This implies that only a little over 6 out of every 1.15 million were completed in 2017, the highest
1,000 homes built before 1970 are removed from either number has been in a decade). In that
the stock each year. Some of the loss rates the case, after 20 years, only 16 percent of the housing

24 FEBRUARY 2019 | GREATER SAN ANTONIO BUILDERS ASSOCIATION