New construction in the United States is an important economic indicator that investors regularly use to draw conclusions about the strength of the economy. Every month around the 17th, the US Census Bureau and the US Department of Housing and Urban Development jointly release the Residential New Construction Report. The strength of the housing market correlates with the state of many other consumer goods, such as new furniture and other household items that often go hand in hand with a move. The ‘housing starts’ report, as it is often called, is indicative of overall economic stability and these three cities topped the list last year.
3. New York
It should come as no surprise that the financial capital of the world is on this list. The engine of capitalism continues to hum as more and more people, especially young people, continue to flock to the Big Apple. As a result, the density of the city is getting worse. In areas like Brooklyn and the Bronx, smaller buildings are regularly torn down to make way for huge skyscrapers to house the growing population. Not everyone is satisfied with the accumulation, of course. Last year you saw more noise complaints at the City’s 311 than any other year, and this year you’re already on your way to breaking that record. There are also complaints, often turning into lawsuits, about the destruction of public space, loss of views and security. Still, as long as there’s an apartment market in New York, and it doesn’t look like demand is going to wane anytime soon, developers will continue to use every available space.
Dallas itself is booming, but the real boom city for new construction is the entire Dallas-Fort Worth metropolitan area. Plano, Texas, just a short drive from downtown Dallas, is poised to be the new North American headquarters of a major automaker, and Frisco is the fastest growing city in the United States. Dallas, like many of the state’s cities, is benefiting from Texas’ business-friendly tax code that has attracted 21 Fortune 500 companies to the state. Texas is no stranger to the boom and bust cycle. In the early 1980s, oil fortunes brought unprecedented opulence, but the wheel turned at the turn of the millennium. Many people worry that the long-term effects of tax cuts will hurt the city again, as low tax rates weaken infrastructure and schools lack long-term funding. For now, however, Dallas is in business.
For many of the same reasons as Dallas, Houston has weathered the recession and prevailed. There were more new construction in Houston than in any other city. As in the Lone Star State of old, the petrochemical industry has spurred Houston’s fortunes. The shale oil boom has brought back a wild mindset. Infrastructure and businesses have been around since the 1970s, but oil companies, and especially gas companies, are generating record profits and hiring more people for higher-paying jobs.
New construction isn’t the end of everything, but it’s a pretty reliable indicator of prosperity. These three cities are at the top of the list.