NCPA - National Center for Policy Analysis

Attracting Home Builders To Cities

January 11, 2000

While the number of new homes built in America's largest metropolitan areas has been growing during the booming 1990s, cities still continue to lag residential development in suburbs, according to a Brooking Institution report.

  • Brookings found that the number of new homes built in large metro areas has grown 78 percent since 1991.
  • But more than 80 percent of new homes built in the 1990s were in the suburbs.
  • But some cities are doing better than others -- the "hot markets" being Orlando, Miami, Tampa, New York, San Antonio, Houston, Dallas and Phoenix.
  • "Cold markets" include Baltimore, Sacramento, Detroit, New Orleans, Chicago, Philadelphia and Los Angeles.

Not surprisingly, building in compact and densely developed cities lags activity in spacious cities with plenty of undeveloped space, Brooking found.

But there are other reasons why some cities fare better than others -- and that has to do with local policies.

In New York, tough policing has helped to cut crime -- making the city a safer and more attractive environment to call home.

Then there are land-use rules. Cities which are not overly restrictive invite residential development. Houston, in fact, has no zoning codes at all. It also helps when taxes and fees aren't burdensome. Cities which operate good schools and maintain business-friendly environments attract residents, also.

Source: "Macrosope, "Building Boom," Investor's Business Daily, January 10, 2000.


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