Cities across America are facing similar infrastructure problems – a lack of housing suitable for middle-income residents.
Starter homes within city limits are increasingly hard to find, forcing new workers to move further and further into the periphery.
An appropriately balanced housing stock helps cities retain college graduates and other skilled workers.
For most of the last decade, young adults have often been targeted as the reason for slowing home sales, supposedly shunning suburbia in favor of rentals in hip urban neighborhoods.
But the number of Millennials buying homes in urban areas is declining – dropping from 21 to 17 percent in recent years.
Millennials now make up the largest share of suburban buyers, according to the National Association of Realtors (NAR), and the rising prices are only pushing their search further out. Their younger counterparts in Generation Z are reaching home buying age and finding the same obstacles.
As a result, mass commutes are becoming a livability issue all over the country, as well as taking tax dollars away from the urban employment centers.
New construction has been touted as the solution, but opportunities for building are severely limited.
Developers have picked over land with appropriate zoning and infrastructure for middle income housing and existing median-priced homes in urban centers are snapped up immediately.
Rezones on city properties can add thousands of dollars to a developer’s risk evaluation, and without immediate returns on projects, builders continue to seek new opportunities in less-regulated suburbs.
Several cities have taken steps to increase affordable housing, easing regulations on subdivision and adding Accessory Dwelling Units (ADUs) to existing homes.
The latest construction numbers may show a silver lining.
The NAR says the supply of urban homes for sale in Q2 2018 rose at three times the rate of the same period in 2017, the largest quarterly improvement in three years. Thirty of the nation’s 100 largest cities now have more supply than a year ago.