Cellar dweller

By CommonWealth Staff 0 Comments Jan 1, 2006

Which comes first, people or houses? Massachusetts ranked a pitiful 48th in the increase of its housing supply from 2000 to 2004, but since the state ranked 44th in population growth, it can be argued that supply isn’t that far behind demand. Nationally, there were 6.8 million additional units for a population growth of 12.2 million, or one new house for every 1.8 new citizens. Here, there were 50,000 additional units for a population growth of 67,000, or one new house for every 1.4 new residents. The idea of a housing crunch may seem all the more puzzling when one looks at population change among 25- to 44-year-olds. (Over the course of this age category, homeownership rates rise from roughly one-third of the population to more than two-thirds.) All but four states recorded a loss of residents in this prime homebuying cohort, as members of the baby boom generation have moved into middle age; in Massachusetts, the decrease amounted to 215,000 people. Considering that the nation’s under-25 population rose by only 1.6 percent over the same period and actually fell by 0.8 percent in Massachusetts, will housing construction eventually lead to a housing glut?

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Not necessarily. Housing demand is partially fuelled by an increase in single-person and childless households, the result of people marrying later and living longer. In Massachusetts, we must also ask whether a tight housing market is a self-fulfilling prophecy. In other words, is the small number of new homes a cause, rather than a symptom, of our stagnant population? The paucity of new homes in Massachusetts, along with Connecticut, New York, and Rhode Island, may keep property values high, but they may also make it tougher to attract people who are hoping to own a home. It’s notable that Michigan, New Jersey, Ohio, and Pennsylvania all saw their 25-44 populations drop by more than 10 percent and are still building houses at a much faster pace than we are. But job growth has been sluggish in almost every state during the first half of this decade, so it’s hard to tell whether more—and presumably more affordable— housing can boost a state’s economy. If the Rust Belt’s economy surpasses that of the Northeast over the next few years, we’ll have an answer.

INCREASE IN TOTAL HOUSING STOCK, 2000-04

Rank	State	Increase in housing units	% change in housing units	% population change	% change age 25-44
1.	Nevada	148,989	18.0	16.8	9.2
2.	Arizona	269,042	12.3	12.0	2.2
3.	Georgia	390,811	11.9	7.8	0.3
4.	Colorado	202,448	11.2	7.0	-2.2
5.	Utah	80,134	10.4	7.0	6.1
6.	Florida	706,319	9.7	8.8	-6.1
7.	Idaho	50,949	9.7	7.7	-2.3
8.	North Carolina	337,744	9.6	6.1	-3.6
9.	Texas	689,171	8.4	7.9	-0.9
10.	South Carolina	137,096	7.8	4.6	-5.6
11.	Virginia	212,395	7.3	5.4	-6.8
12.	Delaware	24,376	7.1	6.0	-4.9
13.	Minnesota	146,749	7.1	3.7	-8.3
14.	Tennessee	155,627	6.4	3.7	-5.1
15.	Washington	155,541	6.3	5.3	-5.8
16.	Indiana	158,292	6.3	2.6	-9.1
17.	Wisconsin	142,645	6.1	2.7	-10.0
18.	South Dakota	19,413	6.0	2.1	-12.3
19.	New Mexico	44,961	5.8	4.6	-8.0
20.	Oregon	82,657	5.7	5.1	-5.1
21.	Kentucky	91,853	5.2	2.6	-6.6
22.	New Hampshire	28,647	5.2	5.2	-10.0
23.	Arkansas	60,161	5.1	3.0	-7.2
24.	Mississippi	59,288	5.1	2.0	-6.3
25.	Missouri	122,337	5.0	2.8	-8.0
26.	Iowa	60,446	4.9	1.0	-11.6
27.	Maryland	105,050	4.9	4.9	-8.5
28.	Nebraska	35,074	4.9	2.1	-10.1
29.	Hawaii	22,331	4.8	4.2	-12.8
30.	Alabama	95,117	4.8	1.9	-7.8
31.	California	590,152	4.8	6.0	-4.1
32.	Kansas	53,719	4.7	1.7	-10.1
33.	Michigan	198,766	4.7	1.8	-10.7
34.	Illinois	208,442	4.3	2.4	-8.2
35.	Alaska	10,570	4.1	4.5	-11.8
36.	Louisiana	72,685	3.9	1.0	-8.9
37.	Wyoming	8,783	3.9	2.6	-11.2
38.	Oklahoma	58,356	3.9	2.1	-7.3
39.	North Dakota	11,136	3.8	-1.2	-14.6
40.	Ohio	183,680	3.8	0.9	-11.6
41.	Maine	24,766	3.8	3.3	-12.2
42.	Vermont	9,909	3.4	2.1	-13.2
43.	New Jersey	104,465	3.2	3.4	-10.1
44.	West Virginia	22,318	2.6	0.4	-11.1
45.	Pennsylvania	135,978	2.6	1.0	-14.4
46.	Montana	10,629	2.6	2.7	-11.8
47.	Connecticut	28,436	2.1	2.9	-13.6
48.	Massachusetts	50,068	1.9	1.1	-10.8
49.	New York	140,052	1.8	1.3	-9.6
50.	Rhode Island	6,468	1.5	3.1	-10.2
US Total		6,766,796	5.8	4.3	-7.9