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    Goodbye Constitution Freedom America by Don Jans

    California Is Spending 16th Least on Residential Construction

    One of the major housing market trends that has emerged from the COVID-19 pandemic is a preference for single-family housing, and this increased demand is driving a surge in new home construction.

    For years, many people—especially more mobile, younger populations—were gravitating toward higher-density living in urban areas with an attractive lifestyle and plenty of economic opportunity. These urban areas tend to have fewer single-family homes, as much of the new construction in these locales has been oriented toward multi-family, high-density residences.

    But after a year of the COVID-19 pandemic, these patterns have begun to shift. Densely populated structures make the social distancing measures required during the pandemic more difficult. Living space has more appeal with the transition to working and schooling from home. This shift is one of the factors that has set off rapid increases in single-family construction over the last year, despite pandemic-related economic shocks.

    The current situation stands in stark contrast to the last major economic downturn, which was set off by a bursting of the housing bubble and saw a collapse in demand for new homes. Many homeowners who bought during the bubble found themselves facing foreclosure or default, unable to keep up with mortgage payments on homes with inflated prices. Meanwhile, the ensuing economic crash made it difficult for other would-be buyers to enter the market. New construction for single-family homes cratered, declining from a peak of 1,798 new authorized units during September 2005 to a low of 337 units at the depths of the recession in January 2009.



    Today, however, economic conditions and the aforementioned shifts in living preferences have actually encouraged growth in the housing sector. While construction for new single-family units dipped sharply due to stay-at-home orders during the spring of 2020, new home construction accelerated rapidly through the rest of the year. Low interest rates, robust government stimulus, and strong household savings have brought more buyers into the market, but the inventory of existing homes has been at record lows. These factors have created a major opportunity for new construction of single-family homes.

    Unsurprisingly, most of that construction is taking place in areas where population growth is highest. Mountain West states like Utah, Colorado, Idaho, and Arizona and Southern destinations like Texas, South Carolina, and Florida are among the places where per capita investment in new residential construction is greatest. They are also among the nation’s fastest-growing states by population: each of those locations was in the top ten for population growth from 2019 to 2020, according to Census Bureau estimates.



    To identify the locations that are spending the most on construction, researchers at Construction Coverage analyzed data from the U.S. Census Bureau’s Building Permits Survey and American Community Survey. Total annual residential construction spending in each location was divided by total population to calculate a per capita figure. The research team also collected data on the total value of new residential construction, the number of new residential units, and the single-family home proportion of total value for additional context and comparison.

    The analysis found that the value of new residential construction in California totaled $25.5B last year—which amounted to $645.41 per resident—compared to $926.92 per resident at the national level. Out of all states, California is spending 16th least on residential construction. Here is a summary of the data for California:

    • Value of new residential construction (per capita): $645.41
    • Number of new residential units (per 10k residents): 26.8
    • Value of new residential construction (total): $25,501,664,000
    • Number of new residential units (total): 105,925
    • Single-family home proportion of total value: 66.5%
    • Percentage change in value from 2019: -4.1%

    For reference, here are the statistics for the entire United States:

    • Value of new residential construction (per capita): $926.92
    • Number of new residential units (per 10k residents): 44.2
    • Value of new residential construction (total): $304,253,199,000
    • Number of new residential units (total): 1,451,579
    • Single-family home proportion of total value: 79.8%
    • Percentage change in value from 2019: +8.5%

    For more information, a detailed methodology, and complete results, you can find the original report on Construction Coverage’s website:


    Construction Coverage

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