Residential Building Permits Concentrated in South and Mountain West

Texas and Florida lead the nation in residential building permits in 2023 through July. Texas had 136,000 building permits and Florida 115,000. California was a distant third, at 65,000. North Carolina was a close fourth, at 57,000, followed by Georgia (39,000), Arizona (32,000), Tennessee (27,000), South Carolina (25,000), Colorado (24,000), Washington (23,000) and Virginia (20,000). Six of the top ten states were from the South, with four of the top ten states from the West (Table 1).

Building Permits per 1,000 Population

North Carolina leads the nation in building permits in relation to population, at 5.34 per thousand population, followed by Florida, at 5.17, Idaho, at 4.87, South Carolina, at 4.74 and Texas at 4.57. South Dakota, Arizona, Utah, Colorado and Tennessee round out the top ten, at between 3.82 and 4.41. California ranks 35th, at 1.67, well below the national average of 2.59 (Table 2).

Single Family Housing Building Permits

Over the period, Texas had the most single family housing building permits (84,000), followed by Florida (71,000), North Carolina (38,000), California (34,000) and Georgia (26,000).

South Carolina had the most single family building permits per 1,000 population, at 4.15. North Carolina had 3.57, Idaho 3.45, Florida 3.20 and Delaware 3.12. Delaware has the advantage of being within hybrid (usually working at home) commuting range of not only the Philadelphia metropolitan area, but Baltimore and Washington. Texas ranked 6th at 2.81, while California ranked 42nd, at 0.87. The national average was 1.58 per thousand residents (Table 3).

Multi-Family Building Permits

Texas also leads in total multi-family unit building permits, with 48,000, also followed by Florida, at 42,000. California ranked third, with 30,000, followed by North Carolina at 18,000 and Georgia, at 12,000.

South Carolina led in multi-family building permits per thousand population, at 2.37, followed by Colorado, at 2.13, Florida, at 1.89, North Carolina, at 1.72 and Utah, at 1.70. Texas ranked seventh, at 1.59 and California ranked 23rd, at 0.76. The national average was 0.95 per thousand residents (Table 4).

It is notable that the District of Columbia had a higher multi-family per 1,000 residents rate than any state, at 2.93. This high number reflects the high-density urban population of the city of Washington (which is the same geography as the District of Columbia) and the resulting higher density housing. The rural and suburban areas that exist in all of the states reduce the multi-family permits per capita, by virtue of their lower density housing.

Single family and Multi-Family Housing

At the national level, single family housing continues to be dominant in building permit counts. Over the first seven months of 2023, single family houses accounted for 61% of the permits. The leading state was Mississippi, at 92%. Delaware, West Virginia, Wyoming South Carolina and New Mexico had between 85 and 90% of their permits in single family housing. Wyoming and Delaware, all with single family permits more than 90% of permits. In Louisiana, Maine, Alabama and Arkansas, the single family building permits were from 75% to 80% of the total (Table 5).

California’s Daunting Housing Shortage

While California rates in the top five in the count of total, single family and multi-family building permits, it lags substantially in permits per thousand residents.

This, however, is not due to California’s slow growth and more recently dropping population. California has a widely publicized shortage of up to 3.5 million housing units, as housing has been under-produced for decades. Governor Newsom promised, in his 2018 gubernatorial campaign to “lead the effort to develop the 3.5 million new housing units we need by 2025 because our solutions must be as bold as the problem is big.” In fact, since then the building permits total has been woefully short of the pace that would be required to build 3.5 million units, totaling at about 520,000 from 2019 to July of 2023. To achieve the objective of 3.5 million new housing units by the end of 2025 would require ramping up building to more than 10 times present the annual rate. This is not achievable.

The South and Mountain West: Leading the Nation

The strongest proportional building permit rates have been concentrated in the South and the Mountain West. The South had 5 states among the top 10 in overall permits per 1,000 residents, followed by the Mountain West, at 4 and one state from the Midwest (South Dakota). In single family housing permits, Among single family housing permits, the South had six of the top ten rates, followed by the Mountain West, with four. Among multi-family permits, the West had five of the top ten positions, including four in the Mountain West and one in the Pacific States. The South had three of the top ten, and the Midwest had two.

Permits per 1,000 residents for each state and the District of Columbia is in Table 6.

Wendell Cox is principal of Demographia, an international public policy firm located in the St. Louis metropolitan area. He is a founding senior fellow at the Urban Reform Institute, Houston, a Senior Fellow with the Frontier Centre for Public Policy in Winnipeg and a member of the Advisory Board of the Center for Demographics and Policy at Chapman University in Orange, California. He has served as a visiting professor at the Conservatoire National des Arts et Metiers in Paris. His principal interests are economics, poverty alleviation, demographics, urban policy and transport. He is co-author of the annual Demographia International Housing Affordability Survey and author of Demographia World Urban Areas.

Mayor Tom Bradley appointed him to three terms on the Los Angeles County Transportation Commission (1977-1985) and Speaker of the House Newt Gingrich appointed him to the Amtrak Reform Council, to complete the unexpired term of New Jersey Governor Christine Todd Whitman (1999-2002). He is author of War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life and Toward More Prosperous Cities: A Framing Essay on Urban Areas, Transport, Planning and the Dimensions of Sustainability.

Photo: Housing subdivision in suburban Houston via Flickr under CC 2.0 License.

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