Building Permits – Positive News for Houston Economy
Sales, new home starts, and the number of building permits issued all point to significant economic gains in the new construction segment of Houston. This is positive news for Houston and the state of Texas, as well.
Houston led the nation in single-family housing permits during the twelve-month period ending in August 2012. The total number of permits issued in the city during that time was over 26,000. This was more than twice the number in any metropolitan area in the country. Houston is no stranger to the number one spot in home construction. In 2011, Houston also led the country in the permit category.
The State of Texas dominated the top 20 spots in the permitting current line-up. In addition to Houston, cities on the list included Dallas (number 2), Fort Worth (number 13), and San Antonio (number 15). Experts point to several reasons for Houston’s preeminent position. First, there is job growth, which has been strong. Second, Houston’s population continues to grow, fueling higher demand for new home construction. Finally, our city is more accommodating than some in the new construction environment. Of all these factors, job growth appears to be the most significant cause for the rise of new home construction permits, since an increase in employment is the best indicator of housing demand in the future.
Elsewhere in the nation, some of the more oppressed markets (for example, Orlando, Florida and Las Vegas, Nevada), are also experiencing a major growth spurt in new home construction. But Texas and the southeast United States are the leaders in this segment of the economy, accounting for six out of ten of the top permitting cities for new single-family construction.
These numbers are good indicators of how Houston and Texas has responded to the recession. The rate of construction starts on single-family homes and rentals was the highest over four year. This represents an increase of over 82% since 2009, which was the low point of the recession.
Some of the ripple effects of the home construction industry comeback are in employment and tax revenue. As of September, the industry employed over five and a half million people. This is expected to increase exponentially over the next few years and each new home built creates approximately three jobs for a year and generates close to $100,000 in revenue. That is encouraging news in tough economic times.
Source: “2012 Houston New Home Construction News Keeps Getting Better.” Web. 27 Nov. 2012.
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