Second Annual Up for Growth Housing Underproduction in the U.S. 2023 Report Finds Housing Shortage Accelerated in Suburbs, Small Towns

Up for Growth, a cross-sector member network committed to solving the nation's housing shortage and affordability crisis through data-driven research and evidence-based policy, today released its second annual report, Housing Underproduction in the U.S. 2023, a longitudinal study tracking nationwide housing underproduction from 2012-2021. The report shows a housing deficit that is spreading rapidly to America's suburbs, small towns and rural areas ? a shift from earlier findings that revealed a housing crisis primarily centered in U.S. coastal and urban areas.

Up for Growth's most recent findings show nationwide underproduction reaching 3.9 million homes in 2021, a 3 percent jump from 2019. But for the first time in nearly a decade, housing availability increased in the country's top 25 major metropolitan areas as the pandemic enabled thousands of Americans to abandon high-cost urban centers. Between 2019 and 2021, this migration created an 11 percent spike in the housing deficit in non-urban areas, in a shift away from large coastal cities. In fact, the number of counties across the U.S. experiencing underproduction increased 32 percent, with the bulk of the increase in suburbs and small towns.

"On its surface, an easing of the housing shortage in urban areas seems like positive news for homeowners and renters. Instead, it tells the story of a deepening crisis resulting from a century of exclusionary housing policy and set off nearly a decade ago by major demographic shifts, a historic economic recession, and chronic housing underproduction," said Mike Kingsella, Chief Executive Officer of Up for Growth. "The COVID-19 pandemic enabled thousands of Americans, abruptly freed from the need to go into offices every day, to abandon high-cost urban centers in favor of suburbs, small towns, and rural communities where the housing crisis has intensified."

The findings, measuring housing underproduction from 2019-2021, update a 2022 Up for Growth report that identified a housing deficit in 47 states and the District of Columbia and 169 metropolitan areas ? finding that housing underproduction in the U.S. reached 3.8 million homes in 2019, up from 1.6 million in 2012. Up for Growth's most recent report found the following:

Among states

• 50 states and the District of Columbia have seen underproduction rise since 2019.
  • The state with the most severe housing gap was California with a shortage of 881,354 homes.
  • The state faring best was North Dakota with a shortage of just 752 homes.
• 10 states with the most severe housing underproduction were, in order of severity: California, Idaho, Utah, New Hampshire, Oregon, Washington, Minnesota, Colorado, Arizona and New Jersey.
  • New to the top ten since 2019 are Idaho and New Hampshire.
  • Falling out of the top ten since 2019 are Massachusetts and Washington, DC.

Among metropolitan areas

• Driven by population loss, housing availability increased 0.3 percent in urban America.
• Metros with the most severe housing underproduction in 2021 were, in order of severity: New York, Los Angeles, Riverside (CA), Washington DC, Chicago, Miami, Dallas, Atlanta, Phoenix and Philadelphia.
  • Number one in the ranking for 2021, the New York metro area displaced Los Angeles, which held the top spot in 2019.
  • Dallas appears on the top 10 list for the first time.
  • San Francisco dropped out of the top 10, ranking number 14 behind Seattle, Minneapolis and Detroit.

Among suburban counties

• Housing underproduction impacted 60 percent of suburban counties nationwide ? up from 24 percent in 2013 ? compared to 55 percent of all U.S. counties.
• Nationally, the suburbs represent a disproportionate 48.7 percent (1.9 million homes) of the nation's total housing underproduction.
• Despite a surge in suburban household formation ? up 5.5 percent from 2019 to 2021?new home construction has not kept pace.
• For every 100 new suburban households formed in the reporting period, only 67 new homes were delivered, indicating a dramatic mismatch between suburban supply and demand.

Among small towns

• Due to a sudden and dramatic drop in unit delivery, housing underproduction increased by 47.8 percent in small towns.
• Among small-town counties, 42 percent experienced housing underproduction in 2021, up from 32 percent in 2019.
• From 2020?2021, household formation in small towns across the U.S. spiked by 300,000, while new housing construction dropped 13.2 percent.

Among rural counties

• 32 percent of rural counties experienced housing underproduction in 2021, up from 19 percent in 2019.
• According to U.S. census data, rural areas lost 400,000 units from 2019?2021, fueling a 94 percent increase in housing underproduction.

"Not a single state is providing enough housing for its citizens, and the nation is poorer, less diverse, and less dynamic than it could be if everyone who wanted it had access to affordable shelter in high-opportunity areas," said Kingsella. "Policymakers must make the straightforward but difficult choice to prioritize new funding sources that allow for diverse housing types, to invest in construction innovations, and to bolster infrastructure funding despite the risks posed by NIMBY opposition. Only then will we slow the pace of housing underproduction and, over time, begin to reverse it."

Up for Growth® is a 501(c)(3) cross-sector member network committed to solving the housing shortage and affordability crisis through data-driven research and evidence-based policy.