For years, many of us in the planning and real estate world have been talking about the mismatch between supply and demand in housing. That is, we’ve been building a very limited type of housing for decades (single family houses on a medium to large lot) well in excess of what the demand actually is for that type. To exacerbate it, we’ve been building these houses in subdivisions and planned communities that essentially force people to drive everywhere for everything. If you’re lucky, you get a trail or a small park to walk to, but most all the other needs of daily life – shopping, work, recreation, school, worship and more require the use of a vehicle.

This week, my good friend John Anderson (as we like to call him – John the Bad) of Anderson Kim in Chico, CA pointed me to a new report from Arthur Nelson and ULI that puts some numbers to this phenomenon. There’s a lot to digest in this, but even just a read through the executive summary is astonishing. The report, titled “The New California Dream – How Demographic and Economic Trends may shape the Housing Market” focuses just on California but has lessons for the rest of the country. California by all accounts leads what happens in much of the rest of the country, so it’s incumbent on us to pay close attention.

One aspect that really jumped out at me is the study of supply/demand for single family “conventional” housing. The report asserts that by a careful study of existing and projected trends, California has excess supply of such houses IN 2035! Nearly 25 years from now, if no new single-family detached houses on medium/large lots are built, supply will STILL exceed demand. And, this is in one of the country’s faster-growing states.

Can you even imagine such a number in any other facet of consumer culture? What if we had more demand than supply of iPads 20 years from today?! Or 20+ years supply of french fries? Would we make any more of them, or seek to find other niches that need to be filled? The answer is obvious.

The report is interesting – here’s a link to it if you want to see for yourself. The short answer: more multifamily housing, more housing near transit, more housing in walkable neighborhoods. That’s not only what we’ve not been building enough of, but it’s what the future is demanding.

Be Sociable, Share!
  • more

7 Responses to The over-supply of single-family housing

  1. Teresa says:

    Wow – that’s incredible. If only they published new books enough for 20 years in advance. It’s interesting though, when the city of Beaufort proposed a small multi-family development on one of its unused lots, the neighborhood (of small detached homes) FREAKED out. It seems like part of the pushback is an assumption that multi-family/mixed use equals crime and undesireable people. Is it a fear of the unknown because there’s so little new urbanism in the South?

  2. Kevin Klinkenberg says:

    Hey Teresa, thanks for the comment. I wish I could say it’s something unique to the South or Beaufort, but that’s a pretty universal fear of multifamily housing, connections with other neighborhoods, etc. We’ve been conditioned as a society to fear many of the things that actually make a place successful in the long-term (density, diversity, connectivity). Funny thing is – nearly all of us live in apartments at one point in our lives, and yet we think it’s something for “others.”

    Even more interesting – Beaufort probably has more New Urbanism per capita than nearly any city in the country, with a couple high-quality new developments, and the old town itself. This phenomenon is something I’ve run across in nearly all kinds of communities, all over America.

  3. Tom Dolan says:

    Hi Kevin:

    This report looks fascinating.I’m not finding an easy way to open a .ashx file. Any tips on how to open it? I can’t seem to find it elsewhere online in a format I can open.

    Time is clearly on our side. See you in Palm Beach?

  4. Kevin Klinkenberg says:

    Seems to open right away on my Mac, Tom – like a .pdf file. Not sure what you might have to do.
    Will definitely see you at CNU 20-


  5. “Nearly 25 years from now, if no new single-family detached houses on medium/large lots are built, supply will STILL exceed demand”

    How is the housing market supposed to recover when supply has outpaced demand for 25 years? It seems like we’ve dug ourselves into a very deep hole and the light at the end of the tunnel is decades away.

  6. Kevin Klinkenberg says:

    That’s certainly true JoAnne, if we focus on typical single-family, medium to large lot housing. The key, however, is to look beyond that – to forms of housing that have been undersupplied for decades, and work in that realm. We’re already seeing recovery and strong building in some of those sectors, and I suspect we’ll see quite a bit more over the next decade. For the typical SFD, though, it appears that it will be dismal for quite some time. Thanks for the comment-


  7. Rajan Mistry says:

    I reckon we ought to leave many of them that people are likely to buy up soon, unless they are in the way of a larger scale urban development.

    As for the rest of them, I have the wonderful idea of returning a suburb to nature by; removing the services/utilities from the area, taking all dangerous human products (including the glass in the windows/light bulbs), as well as all the doors.

    And that’s it! … I have a good feeling this will begin vegetating quickly, possibly harbouring a few interesting animals that need some shelter.

    Of course there are many dangers, such as wildfires, eventual collapse, being an eyesore and of course, being frequented by degenerates. My experimental curiousity is not inhibited by reality.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Set your Twitter account name in your settings to use the TwitterBar Section.