According to NAR’s most recent Consumer Preference Survey, between 39% and 60% of Americans like the idea of urban living, but only about 5-10% of the building stock in most metros is located in dense urban areas.
Basically people want a lot more apartments than what currently exists, and if we don’t want rents to keep spiking, then we needed to build a crap ton more apartments yesterday, we need to build a crap ton more apartments today, and we’ll need to build a crap ton more apartments tomorrow.
I hear a lot of *alternative* economic theories as to why building a crap ton more apartments won’t lower rents, but this large spread between how much urban housing exists and how much people want has been with us for many years now, and it’s utterly unsurprising that the recent back-to-the-cities movement from richer, better-educated populations has sent rents soaring.
Please, quibble with these numbers to your heart’s content. Sixty percent of respondents say they prefer a neighborhood with a mix of houses and stores and other businesses they can walk to, but 57% also say they’d prefer a detached single family home with a longer commute to an apartment or condo with a shorter commute and walkable access to amenities.
These kinds of survey results are notoriously schizophrenic (you can’t maximize privacy from neighbors and walkable proximity to amenities) but they capture the basic contours of the market.
The number of people who say they really want urban apartments and condos is around 30-40% of the market, and then there’s another 20% who’d be open to a trade-off between privacy and proximity if urban apartment prices came down.
And then in the background of all this, the population has kept growing, so we’d still need to build a crap ton more urban apartments even if the distribution of American housing preferences didn’t change at all.
Any way you cut it, we don’t have enough apartments, that’s why prices are going up, and we need to build a crap ton more, on the order of 20-30% of the US building stock.