Study: More jobs, but too few rooms

Boul­der, Den­ver, Springs on the list

The Denver Post - - BUSINESS - By Shay Cas­tle

In the eco­nomic re­cov­ery, Boul­der County added more than three times as many jobs as hous­ing units, driv­ing a se­vere im­bal­ance in sup­ply that has pushed the av­er­age cost of a house to new and, some say, ter­ri­fy­ing heights.

The county added 3.3 jobs for ev­ery unit of new hous­ing from 2010 to 2015, ac­cord­ing to a re­port Wed­nes­day from Apart­ment List.

Many of Amer­ica’s bustling met­ros are starved for homes, the re­port said, with the most un­der­sup­plied see­ing the big­gest in­creases in rents. Only 10 of the na­tion’s 50 largest met­ros have seen home con­struc­tion keep pace with job growth since the Great Re­ces­sion. Apart­ment List is an on­line mar­ket place for rent-

al units based in San Fran­cisco.

“We are see­ing a lot of big cities — San Fran­cisco, Austin, Seat­tle — that are thought of as do­ing well, but that’s where you’re see­ing (cities) not sup­ply­ing enough hous­ing,” said Chris Salviati, who wrote the re­port. “And that’s where you’re see­ing these price in­creases.”

Den­ver was also hous­ing-strapped, adding 2.9 new jobs for ev­ery new hous­ing unit per­mit­ted from 2010 to 2015. Dur­ing the same pe­riod, Col­orado Springs added 1.5 jobs for ev­ery home built.

Of 463 stud­ied met­ros, Boul­der was the 26th most un­der­sup­plied. San Jose, Calif., was No. 1.

Apart­ment List’s anal­y­sis, which looked at build­ing per­mit data from the U.S. Cen­sus Bu­reau and em­ploy­ment num­bers from the Bu­reau of La­bor Statis­tics, also took a longer view, the 10 years from 20052015. By that mea­sure, cities were do­ing a bet­ter job of keep­ing up.

Boul­der County added 18,368 jobs and is­sued build­ing per­mits for 9,606 new hous­ing units dur­ing that decade, 1.9 jobs for ev­ery unit. In Den­ver, 201,000 jobs were added, 1.5 for ev­ery hous­ing unit. That’s in line with a more bal­anced mar­ket, Salviati said.

“When sup­ply and de­mand are bal­anced, you would ex­pect to see one to two new jobs per per­mit. When we see jobs per per­mit above that level, that’s in­dica­tive of a mar­ket that’s not sup­ply­ing enough (hous­ing).”

From 2010 to 2015, the lo­cal econ­omy left home con­struc­tion in the dust. As a re­sult, home prices and rents rose quickly and to new heights. Boul­der County rents in­creased nearly 30 per­cent in those five years, Apart­ment List found, not ad­justed for in­fla­tion. Rents in­creased 52 per­cent in Den­ver.

That trend of mass ap­pre­ci­a­tion is in line with his­tory, at least in the city of Boul­der. The city has con­sis­tently gone through four-year cy­cles of ro­bust price growth since 1976, a study by Re/Max’s D.B. Wil­son and Mike Malec found.

The cur­rent cy­cle, which be­gan in roughly 2012, is run­ning its course, Wil­son said, in­di­cated by slow­ing price gains. Ap­pre­ci­a­tion from 2015-2016 was 14 per­cent. From 2016 to now, it’s about 5.9.

“We’re start­ing to see ap­pre­ci­a­tion slow down (and) an in­crease in in­ven­tory,” he said. “I be­lieve we’re go­ing into a more bal­anced mar­ket.”

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