The nation's apartment builders are out with a new report showing that while housing construction in suburban America has grown at an amazing pace over the past decade, it is nothing compared to the growth of residential construction in the nation's central cities.

According to the National Multi Housing Council, the number of housing units - both single and multifamily - increased 73 percent overall for the nation from 1991 to 1999.

During that period, however, central city construction in the 50 largest metro areas increased more rapidly than did suburban construction. The end result was an increase in central cities' market share of building permits in metro areas from 17 percent to 21 percent.

"This report provides statistical support for the anecdotal reports of an increase in urban apartment construction," says the study author and NMHC Chief Economist, Jack Goodman.

"Our analysis finds that center city construction has increased faster than suburban construction, and apartment construction has gained market share from single-family construction, especially in big cities. As a result, apartment construction in close-in neighborhoods is being undertaken at a pace unmatched over the past 10-to-20 years."

NMHC released the study as part of its ongoing effort to make sure that the nation's housing policies - especially in an election year - include people who rent dwellings, rather than own them. Over the past several years, NMHC complains, Federal housing policy has focused only on driving up home ownership as an answer to a variety of problems and has tended to overlook evidence that apartment renters also can be strong community citizens.

According to the study, while both cities and suburbs recorded increases in housing production during the 1990s, within metro areas the performance of central cities and their suburban rings were not always closely linked. For example, city construction increased 662 percent in New Orleans, even as suburban construction was up just 65 percent.

The study indicated that while the apartment market's share of residential construction nationally has been fairly steady in the past three years, in big cities the mix of construction has continued to shift toward multifamily. By 1999 multifamily's share in big cities reached 55 percent, up from only 33 percent in 1992.

Adding in the suburban rings, the top five metro areas with the greatest gain in multifamily market share were: Austin, San Antonio, Rochester (NY), Denver, and Kansas City.

"Several factors help explain the shift toward urban apartment construction," said Goodman. "Demographic changes in our population, with renewed growth in the number of young adult and single person households, are helping drive apartment demand.

"These consumers often favor close-in locations, especially as traffic woes mount in many of the nation's biggest metropolitan areas. Concerns about sprawl have also made local officials in many jurisdictions more open to higher density housing, particularly near existing public transportation."

Published: June 20, 2000

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