As of November 2023, it was estimated that there were 988,000 homes under construction in multi-family buildings containing 5 or more units. This is in comparison to 680,000 single-family homes, according to US Census data. (Looking at the below graph, it's also interesting to see how the supply of single-family homes dropped off after the global financial crisis and multi-family apartments took off.)

All of this means that in 2024, the US is on track to complete more apartments than it has in many many decades. In fact, exactly similar to what we experienced here in Toronto, if you want to find a comparable multi-family supply number, you need to go as far back as the 1970s (see below). Of course, the US had fewer people back then, and so on a per capita basis, it was building more housing.

Still, all of this new supply is having an impact. Apartment List recently published its national rent report, over here. And overall, it found that:

Rent increases are currently being moderated by a robust construction pipeline expected to deliver a decades-high number of new apartment units in 2024.

More specifically, they found that the cities with the most supply are now seeing the largest rent declines:

Many of the steepest year-over-year declines remain concentrated in Sun Belt cities that are rapidly expanding their multifamily inventory, such as Austin (-7.4 percent year-over-year), Raleigh (-4.4 percent), and Orlando (-3.9 percent).

If you're an apartment developer, this is not what you want to see. It means that increased competition is creating downward pressure on rents and that vacancy rates are probably rising. But if you're someone looking to rent an apartment, this is exactly what you want to see. You want more affordable housing. And so, as a consequence, you want more homes to be built. Because when supply outstrips demand, this is what you get.

Charts: Apartment List

Let's add some historical context to yesterday's post about autonomous vehicles. As the regular non-autonomous version of cars started to infiltrate our cities in the early 20th century, largely following the creation of the mass-produced Ford Model T, there was a general view that cars were dangerous and a menace to cities. Arguably, not much has changed.

So in the 1930s, the Federal Housing Authority decided to publish a pamphlet explaining what street networks it thought were suitable for this new emerging car world and which street networks were not. The exact terms that they used were "bad" and "good", and here's what that looked like (taken from this CNU article):

The "bad" ones are largely how the US liked to design its cities before the arrival of the car. Some historic settlements, like Boston and Manhattan south of 14th street were based on different street logics, but as far back as the 1680s, William Penn had already started laying out a grid iron plan for Philadelphia. And in reality, this kind of street pattern goes all the way back to ancient cities.

However, when the car arrived, these grid iron plans were thought to offer an inadequate amount of separation between people and machine. The solution was to optimize around the car and introduce a clear hierarchy of different streets. Big streets for moving cars quickly, and smaller streets, like cul-de-sacs, for people to live on.

These "good" examples, of course, represent the modern suburb. But we now recognize that these types of street networks are unequivocally terrible for walkability, the environment, public health, social equity, and a whole host of other things. I mean, look at this extreme example of two suburban homes in Orlando whose backyards adjoin but are technically separated by 7 miles and a 20-minute drive!

My point with all of this is that, for many/most at the time, this was progress. Cars were the future and there was optimism about the kind of freedoms and other benefits that they would bring to people. And this optimism is perhaps not all that different from what many people feel today, myself included, when it comes to autonomous vehicles.

So on the one hand, you could point to the car and say, "look at all the damage that this thing did to our cities. Let's not do that again. Autonomous vehicles must be stopped." But that's akin to wishing the car was never invented. Another option is to point to the negative externalities associated with the car and say, "look at what we've done. We can do better. Let's make our cities better."

Positive change, no matter how late, is always a possibility.

Recent job posting data from Indeed has revealed a bit of a paradox. The metro areas where more people are able to work from home -- i.e. tech hubs and finance centers -- have experienced larger job posting declines compared to all other US metros, as well as to tourism destinations such as Las Vegas and Orlando.

We know that the hospitality and tourism sector has been the hardest hit by the current environment. But that doesn't appear to be the biggest driver for overall job losses. In fact, one of the key takeaways is that job losses between February and June 2020 look to be correlated with metro size. That is, the bigger the city, the greater the job losses (% change).

So what's going on?

Well, according to Indeed, it's important to look at the local job mix. In "work-from-home metros" like Seattle, San Francisco, and Boston, there has been a relatively high percentage of people who were able to quickly transition to working from home. This is reflected in the anonymized mobile-device data for these cities. More people at home. Less mobility. And a seemingly stronger adherence to social-distancing protocols.

The problem with this outcome is that it crushes most of the in-person sectors and businesses that relied on this workforce moving about the city -- things like food prep and beauty & wellness. I mean, just think about all of the food businesses that survive off lunches in a CBD. According to Indeed, it is these sorts of local economic connections that have really been driving the declines in job postings and overall payroll employment during lockdown.

As of November 2023, it was estimated that there were 988,000 homes under construction in multi-family buildings containing 5 or more units. This is in comparison to 680,000 single-family homes, according to US Census data. (Looking at the below graph, it's also interesting to see how the supply of single-family homes dropped off after the global financial crisis and multi-family apartments took off.)

All of this means that in 2024, the US is on track to complete more apartments than it has in many many decades. In fact, exactly similar to what we experienced here in Toronto, if you want to find a comparable multi-family supply number, you need to go as far back as the 1970s (see below). Of course, the US had fewer people back then, and so on a per capita basis, it was building more housing.

Still, all of this new supply is having an impact. Apartment List recently published its national rent report, over here. And overall, it found that:

Rent increases are currently being moderated by a robust construction pipeline expected to deliver a decades-high number of new apartment units in 2024.

More specifically, they found that the cities with the most supply are now seeing the largest rent declines:

Many of the steepest year-over-year declines remain concentrated in Sun Belt cities that are rapidly expanding their multifamily inventory, such as Austin (-7.4 percent year-over-year), Raleigh (-4.4 percent), and Orlando (-3.9 percent).

If you're an apartment developer, this is not what you want to see. It means that increased competition is creating downward pressure on rents and that vacancy rates are probably rising. But if you're someone looking to rent an apartment, this is exactly what you want to see. You want more affordable housing. And so, as a consequence, you want more homes to be built. Because when supply outstrips demand, this is what you get.

Charts: Apartment List

Let's add some historical context to yesterday's post about autonomous vehicles. As the regular non-autonomous version of cars started to infiltrate our cities in the early 20th century, largely following the creation of the mass-produced Ford Model T, there was a general view that cars were dangerous and a menace to cities. Arguably, not much has changed.

So in the 1930s, the Federal Housing Authority decided to publish a pamphlet explaining what street networks it thought were suitable for this new emerging car world and which street networks were not. The exact terms that they used were "bad" and "good", and here's what that looked like (taken from this CNU article):

The "bad" ones are largely how the US liked to design its cities before the arrival of the car. Some historic settlements, like Boston and Manhattan south of 14th street were based on different street logics, but as far back as the 1680s, William Penn had already started laying out a grid iron plan for Philadelphia. And in reality, this kind of street pattern goes all the way back to ancient cities.

However, when the car arrived, these grid iron plans were thought to offer an inadequate amount of separation between people and machine. The solution was to optimize around the car and introduce a clear hierarchy of different streets. Big streets for moving cars quickly, and smaller streets, like cul-de-sacs, for people to live on.

These "good" examples, of course, represent the modern suburb. But we now recognize that these types of street networks are unequivocally terrible for walkability, the environment, public health, social equity, and a whole host of other things. I mean, look at this extreme example of two suburban homes in Orlando whose backyards adjoin but are technically separated by 7 miles and a 20-minute drive!

My point with all of this is that, for many/most at the time, this was progress. Cars were the future and there was optimism about the kind of freedoms and other benefits that they would bring to people. And this optimism is perhaps not all that different from what many people feel today, myself included, when it comes to autonomous vehicles.

So on the one hand, you could point to the car and say, "look at all the damage that this thing did to our cities. Let's not do that again. Autonomous vehicles must be stopped." But that's akin to wishing the car was never invented. Another option is to point to the negative externalities associated with the car and say, "look at what we've done. We can do better. Let's make our cities better."

Positive change, no matter how late, is always a possibility.

Recent job posting data from Indeed has revealed a bit of a paradox. The metro areas where more people are able to work from home -- i.e. tech hubs and finance centers -- have experienced larger job posting declines compared to all other US metros, as well as to tourism destinations such as Las Vegas and Orlando.

We know that the hospitality and tourism sector has been the hardest hit by the current environment. But that doesn't appear to be the biggest driver for overall job losses. In fact, one of the key takeaways is that job losses between February and June 2020 look to be correlated with metro size. That is, the bigger the city, the greater the job losses (% change).

So what's going on?

Well, according to Indeed, it's important to look at the local job mix. In "work-from-home metros" like Seattle, San Francisco, and Boston, there has been a relatively high percentage of people who were able to quickly transition to working from home. This is reflected in the anonymized mobile-device data for these cities. More people at home. Less mobility. And a seemingly stronger adherence to social-distancing protocols.

The problem with this outcome is that it crushes most of the in-person sectors and businesses that relied on this workforce moving about the city -- things like food prep and beauty & wellness. I mean, just think about all of the food businesses that survive off lunches in a CBD. According to Indeed, it is these sorts of local economic connections that have really been driving the declines in job postings and overall payroll employment during lockdown.