New City Construction - 8/18/14
For decades, new construction was largely a suburban phenomenon. Job and population growth tended to be concentrated in leafy subdivisions located away from central cities, which prompted construction of new residential subdivisions and suburban office parks.
But times have really changed. Today, a growing share of development is taking place in center cities as both population and jobs return. As reported in the Wall Street Journal, Toll Brothers, the nation’s largest luxury builder of homes, reports that revenue from its multifamily and high rise tower businesses represented more than 20 percent of the company’s total sales last year, up from less than 3 percent in 2000. The company is presently looking to expand its urban business into Boston, San Francisco and Miami.
Housing consultant IBISWorld estimates that by the end of the current year, national construction of new condominiums and apartments buildings will have increased at an annual average rate of 28 percent since 2009. And much of the construction is happening in cities. According to analysts, suburban markets aren’t seeing the same interest in speculative housing development that was observed a decade ago during the housing boom.