10 US Cities Spending Big Money on New Housing Construction
LPETTET / Getty Images/iStockphoto
Bob Haegele
7 min read
Nationwide, the housing market remains in something of a frenzy. A waning in new construction in the wake of the Great Recession combined with increased demand during the COVID-19 pandemic has left some cities with a housing supply crunch.
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This supply crunch is especially acute in areas such as the Midwest and the Rust Belt, where growth in new housing is minimal at best. All this is underscored by the pandemic, during which demand for single-family homes has soared to unprecedented levels.
The reason for increased demand is multifaceted. For one, many are demanding larger and more comfortable spaces due to the remote work boom. In addition, many are preferring single-family homes as opposed to denser, multifamily homes, as they look to socially distance during the pandemic.
First on the list is Tampa, Florida. As we will find out, most of the cities spending the most on new construction are in the south, so this is no surprise. Although the MSA has just over 3 million residents, Tampa was top 10 in the nation for new construction last year. In 2020, it spent $5.3 billion on new housing projects. The total number of housing units built in Tampa in 2020 was 20,348. That number makes 656.84 new homes per 100,000 residents. The vast majority of new homes built were single-unit dwellings, accounting for 79.1% of new construction.
Less than 100 miles away from Tampa is Orlando, the city that built the ninth-most new homes in 2020. It might be home to Disney World, but Orlando’s MSA is actually smaller than that of Tampa with just under 2.4 million residents. Despite a size that is modest among metros in this gallery, Orlando spent $5.48 billion on new housing construction in 2020. It also built significantly more homes than its neighbor, with 24,499 new homes built. Per 100,000 residents, it built about 1,026 homes. Over 62% of those homes were single-unit homes, while 35.5% had five or more units.
8. Charlotte-Concord-Gastonia, North Carolina-South Carolina
The banking hub of the southeast, Charlotte built the eighth-most homes in 2020. Home to Bank of America and Wells Fargo’s East Coast headquarters, Charlotte is growing rapidly. As a result, it spent $5.63 billion on new housing in 2020 and built 26,548 new homes. With 2.6 million residents, it built 1,006.79 new homes per 100,000. Charlotte also built a high percentage of single-unit homes, making up 74.2% of new construction in 2020. Just over 25% of new homes had five or more units.
We head to the West Coast for the next city in this gallery. Although Los Angeles and California are more generally known for sky-high real estate values, Los Angeles did spend handsomely on new construction last year. At $6.23 billion, this metro spent the seventh-most in 2020. Of course, it also has one of the largest metros in the country with over 13 million residents. With 26,930 new homes, Los Angeles built just 205.08 homes per 100,000 residents. Another anomaly for Los Angeles is that it is one of the few metros to build five or more unit homes than single-unit homes. Just over 57% of new construction in 2020 went to those larger, five-plus unit buildings.
Fast-growing Austin is home to a number of major companies in the U.S., including Oracle and Whole Foods. Several other Fortune 500 companies have offices there as well. Its metro still remains relatively small on this list at 2.3 million residents. Nonetheless, it spent $7.15 billion on new housing projects in 2020, good for No. 6 in this gallery. With 42,264 new homes built, Austin constructed 1,841.32 homes per 100,000, one of the highest figures in the nation. The highest percentage was single-unit homes, at 53.4%. Just over 45% of homes had five or more units.
Atlanta has been a powerhouse of the south for years, featuring the busiest airport in the country and the second-busiest in the world. With just over 6 million residents, it also has the sixth-largest MSA in the country. In terms of spending on new housing, it ranked No. 5 in 2020, spending $7.16 billion. That goes along with 32,346 new housing developments or 537.23 per 100,000 people. Of those housing units, nearly all were single-unit dwellings, with 88.5% of the total.
4. New York-Newark-Jersey City, New York-New Jersey-Pennsylvania
The largest metro in the country (and the world) is spending significantly on new housing, although not quite the most. In 2020, the New York metro spent $7.74 billion on new housing. The number of new housing units in 2020 totaled 54,835. Given the large number of residents in this area, that only makes for 265.85 housing units per 100,000. Like Los Angeles, the majority of new housing New York is building is large, multi-unit buildings; 75.4% of new housing were projects consisting of five or more units.
The capital of Arizona and the state’s most populous city, the Phoenix metro has 4.86 million people. And Phoenix is taking new housing seriously, spending the third-most on new housing projects in 2020, with $10.8 billion in new spending. It built slightly fewer units than New York at 48,219. Still, a much lower population means it built more per capita, with 992.58 units per 100,000. In Phoenix, most new housing projects are single-unit dwellings, with 65.7% of the total.
People in Texas are drawn to the state’s warm weather and lack of state income tax. But Texas is also top 10 in the country for property tax, which lends itself to new housing. With a population just shy of 7 million, the Houston metro is fifth in the country, but it spent the second-most on new housing in 2020 with a total bill of $12.7 billion. It built 60,812 new housing units last year, for a total of 869.07 per 100,000 residents. Single-unit buildings were most common, making up 72.4% of new housing. Buildings with five or more units accounted for 25.9%.
Topping the list of the most spending on new housing is yet another city in Texas. In 2020, the Dallas metro area spent $13.1 billion to build new housing. With 6.37 million residents, it is slightly smaller than Houston, despite spending more. In doing so, it also built the most housing units, coming in at 70,540. Thus, its per-capita building was strong as well, with 1,107.98 new units per 100,000. Most were single-unit buildings, although the percentage is lower than some metros on this list, with 70.8% having one unit. Just over 28% of new housing contains five or more units.
