US Census Bureau construction permit data

My post on the bull run of Texas housing construction permits prompted a dive into U.S. Census Bureau permit data from the past quarter century.

OVERALL CONSTRUCTION PERMIT TRENDS

1. The housing crisis hangover has been a very long one as we just surpassed the annual construction permit volume from 1995 this past year.
2. If not for the rise of multifamily permits, we'd still be in a hole. Unit permits for 5+ builds accounted for over a third of all permits for the past eight years, up from around a fifth pre-crisis.

SHARE OF PERMITS BY REGION

Three U.S. Census Bureau regions have seen the most change in share of housing construction permits over the past quarter century:

1. East North Central (Illinois, Indiana, Michigan, Ohio, Wisconsin) has been nearly halved;
2. West South Central (Arkansas, Louisiana, Oklahoma, Texas) has powered ahead; and
3. Mid Atlantic (New Jersey, New York, Pennsylvania) has gained materially.

TOTAL PERMITS BY TOP STATES

The top states' share of permits has steadily increased since 1995, rising from under a quarter to over a third of total construction permits. Texas alone accounted for 15% of permits in 2019.

Does Boston's bad weather drive out-migration?

A peek into the other side of the trends in population migration... Boston

1. Even though Massachusetts is the fastest growing Northeastern state, it's growth over the past decade has lagged the national average by 150 bps
2. Boston would have lost population if not for international migration

Luc Schuster of The Boston Foundation: "We are losing some residents to other parts of the country with strong economies and better weather - which is one of the factors, certainly - and cheaper housing."

The Missing Middle...

National Association of Home Builders about the Missing Middle has a chart that shows a stunning drop in 2-4 unit multifamily permits in the late 2000's. It bears mention that all housing permits plummeted during that period. Fortunately a relative representation of the same data set does indeed show a sustained reduction in share of 2-4 unit permits over the period.

Unfortunately, we lack a complete picture of Accessory Dwelling Unit impact to this Missing Middle housing stock since the U.S. Census Bureau only tracks ADUs that are new structures. Given that Freddie Mac estimates a total 1.4mm ADUs and the general trend towards promoting this configuration, missing middle seems to be an uncannily apt description of the situation.

The Economist: The case for more state spending on R&D

The Economist: “It will take time for new ideas to have big effects. And in a world of 24-hour media, it will be hard to sweep unavoidable stories of wasted money and failed projects under the carpet—however inevitable, even welcome, some sorts of failure may be. But at a time when the need to boost innovation has never been greater, politicians may conclude that rebooting the innovation system is worth the risk.”

A full reading requires the repurposing of Winston Churchill’s quip about democracy: “State-funded R&D is the worst form of R&D, except for all the others."

More signs of the "K" - Manhattan edition

Curbed: "It Looks Like the Rich Aren’t Abandoning New York After All" ...meanwhile, the jury's still out on the lower 60%

Why does El Camino Real in the Peninsula look like it's stuck in the 1970s?

"According to UrbanFootprint’s analysis of El Camino Real, this lone corridor (between Daly City and San Jose) could theoretically accommodate more than 300,000 new units if the road was upzoned to allow residential development and its parking lots and big-box stores became low-rise apartment complexes."

California's aggregate building permits between 2010 and 2019 fell nearly 600k short of Texas' total despite having a population over a third higher.

ESG as part of executive compensation

“In 2021, Apple is adding an ESG “bonus modifier” to its cash incentive program which can swing the total bonus payout by 10% — executing on ESG goals can increase the bonus by 10%, while failing to hit ESG targets could cost Apple’s top brass a bonus reduction of the same amount.”

Housing supply continue to drop

 Redfin: New listings fell 3%, the first annual decline since July even as pending sales were up 35%

Housing permits booming in Texas

While the aggregate US single-family housing construction permits is struggling to get back to the 100 (Jan ‘20 level), the Texas component is nearing 180. And remember that Texas has an outsized share of permits, accounting for roughly 15% total.

NYT: They Can’t Leave the Bay Area Fast Enough

"But the migration from the Bay Area appears real. Residential rents in San Francisco are down 27% from a year ago, and the office vacancy rate has spiked to 16.7%, a number not seen in a decade."

Manhattan by comparison saw rents drop 17% from a year ago and and has a 13% office vacancy rate. Double-clicking on the latter approximately a quarter of Manhattan's office vacancy were in the form of subleases compared to half in San Francisco.

First Community Bank of Tennessee buys mortgage lender

$814mm First Community Bank of Tennessee buys A Mortgage Boutique. One side made a very smart decision - not sure which... 

Causes and implication of the pandemic increase in house prices

Harvard Joint Center for Housing Studies fellow Don Layton's excellent summary of the state of play in pandemic-era US residential housing. Key point, don't expect a replay of the Great Recession with its Ownership Society hangover from binging via loose lending standards and the use of “house as piggy bank” which led to a foreclosure crisis and 1-in-4 homes being underwater. We will surely face headwinds in the days ahead, but gross pattern-matching will not provide the right insights.