The trend of suburbanization characterized a long chapter in American residential living, but in recent decades many urban areas have seen transformations as waves of new apartments and condos have been built. Beginning in the 1990s, new building permits began to increase in many core urban areas.

A 2011 U.S. Environmental Protection Agency report, “Residential Construction Trends in America’s Metropolitan Regions,” analyzed U.S. Census residential building permit data for the 50 largest metropolitan regions over a 19-year period, from 1990 to 2008. By comparing the volume of permits issued in urban areas to those issued in suburban communities, the study sought to identify if there had been a “fundamental shift” in U.S. residential construction patterns.

The report’s findings include:

• In almost 50% of the metropolitan areas examined, urban core communities dramatically increased their share of new residential building permits. In 15 of the 50 regions, the central city more than doubled its share of permits.
• The increase was particularly dramatic over the most recently studied five years, from 2003 to 2008.
• Overall growth varied even among large cities: New York City’s share of new building permits in the region, as compared with the suburbs, went from 15% in the early 1990s to 48% in the 2000s; Chicago saw its share go from 7% to 27% over the same period; Atlanta went from 4% to 14%.
• Though New York led in such growth, urban redevelopment in eight other regions accounted for between one quarter and one half of new regional construction: Chicago; Dallas; Los Angeles; Miami; Norfolk/Virginia Beach, Virginia; Portland, Oregon; San Diego; and San Francisco.
• Though the urban building trend is clearly pronounced in some places, not all U.S. regions have seen the same growth in central cities; new urban housing still accounts for less than half of new residential units in most regions.

While acknowledging that substantial shifts have occurred, the report’s authors nevertheless conclude that these trends are “not yet reshaping the face of urban America as a whole,” and much new residential construction “still takes place on previously undeveloped land at the urban fringe.” The report suggests that continued research will be needed to assess how this push toward urban projects, which are typically capital-intensive, will be impacted in the post-financial crisis, credit-tightened environment.

Tags:economy

By John Wihbey | April 28, 2011