Job Growth Outpaces New Home Construction In Most Metros

According to a new study from Apartment List, only 10 of the nation’s 50 largest metros have built enough housing to keep up with job growth over the last few years.

Four metro areas have added more than two jobs for every new housing unit constructed between 2005 and 2015: San Jose, Calif. (3.2), San Francisco (3.0), Boston (2.4), and Salt Lake City (2.2). From 2010 to 2015, San Francisco added 6.8 jobs for every one housing unit, topping San Jose (5.5) and Boston (4.1).

San Antonio, Denver, New York City, and Seattle are among the other markets that have added more new jobs than new housing over the last decade. Apartment List notes that a healthy market should add one new unit for every one to two new jobs to keep pace with demand.

The mismatch has resulted in rising rental costs. Charlotte, N.C. added the same number of jobs as San Jose did between 2005 and 2015, but issued permits for three times as many housing units. Rents increased 57 percent in San Jose, but only 30 percent in Charlotte. Atlanta added nearly as many jobs as Denver did over the same time period, but Atlanta approved twice as many permits. Rents rose 52 percent in Denver, but only 25 percent in Atlanta.

The report also found that metros’ core counties tend to be stingy with supply, but the outlying counties are more likely to add new housing as people find more affordable homes farther away from the city. For instance, San Francisco County added 6.2 jobs per permitted unit from 2005 to 2015, but the city’s non-core suburban counties had a more balanced 1.8 job-to-home ratio. Boston, New York City, San Jose, and Washington, D.C., have similar core-to-non-core splits.