While across the country approved housing permits remain about 38 percent below pre-recession peaks, Dallas is chugging along, despite certain conditions hampering a more robust effort.
In the Dallas-Fort Worth-Arlington MSA, about 5.9 new housing units per 1,000 residents were permitted in Dallas from 2008 to 2018, making the area seventh among the 50 largest U.S. metros, a new study from Apartment List released this week found. In that same time frame, DFW added 8.3 jobs per 1,000 residents, ranking eighth. Just shy of one-and-a-half jobs were added for every new housing unit, indicating at least close to a balance between supply and demand. 
In that 10 year period, 589,514 jobs were added, and 418,987 housing permits were approved.
But the bigger tale is in the multifamily numbers, where new multifamily units have accounted for 42 percent of housing permits in Dallas since 2006, compared to 27 percent pre-recession. Nationally, multifamily accounts for 33.9 percent of the permit share.
Dallas Builders Association executive director Phil Crone said what he’s seen does to a certain extent jibe with what Apartment List found.
“Near-record job growth, low unemployment and favorable mortgage rates here are creating the perfect environment for new housing demand,” he said. “However, starts are declining due to local regulation (longer lot development times) and recently, a very wet spring.”
And builders are beginning to move to construction in demand price points, too.
“Builders are pivoting to lower price points as fast as they can because that is where buyer demand is,” Crone said. “Multifamily is filling that void to a certain extent in many areas. That’s mainly out of necessity. It doesn’t indicate that single-family homes are any less in demand, they are just less attainable.”
“For example, new home prices have gone up 25 percent since 2015 while wages have only risen by about half that.”
Apartment List points out that multifamily construction rebounded quite a bit from recession-era permit numbers, but single-family construction continues to recover more slowly.
“The number of single-family housing units permitted in 2018 was barely half the number permitted in 2005,” the report said. “Consequently, multi-family units have made up a much greater share of new housing in the post-recession period. From 1990 to 2005, multi-family units made up 23.4 percent of all residential building permits issued, while from 2006 to 2018, that share increased to 33.9 percent.”
Dallas, however, was part of the outlier Sun Belt metros that were able to thrive economically and come closer to housing keeping pace with job growth, whereas the multifamily growth is more pronounced in coastal metros.
“Notably, single-family is still the dominant type of new housing being built in these metros, and while the multi-family share is on the rise in these regions, the increases are much more muted than those observed in the dense coastal metros discussed above,” the report said.
“While we find that proportionally more multi-family housing has been built in recent years, the metros where it is most prevalent tend to be the coastal superstar cities that have struggled to build enough new housing overall,” the report concluded. “Meanwhile, fast-growing Sun Belt metros have continued to rely on single-family homes to maintain sufficient housing supply.”
To see the whole report, click here.
