In Houston, Sprawl Isn’t a Four-Letter Word. Increasingly, Neither is Density.
On Sept. 16, Zillow’s Housing Roadmap to 2016 tour stops in Houston, one of America’s fastest-growing cities and also — mostly — one of its most affordable. But despite its successes, Houston is not immune to the many challenges facing other rapidly growing American cities, including rising income inequality, emerging rental affordability concerns and ongoing efforts to diversify its economic base.
In advance of our visit, Zillow Research will be publishing a series of Houston-focused research briefs aimed at shedding light on some of the unique trends we’re observing in the area. All of our Houston research can be found here, and we encourage you to please join us on Sept. 16 if you can. If you can’t, please join in the conversation on social media with the hashtag #HousinginAmerica.
Houston is one of America’s fastest-growing cities, adding thousands of new residents every month and, until recently, relying largely on sprawl – building out, not up – to support this growth. An abundance of available land, coupled with the city’s famously de-centralized (though certainly not non-existent) regulation, has allowed for the construction of thousands of new homes with relative ease, and has helped keep them largely affordable at the same time.
But while sprawl as a strategy has worked for Houston, more recent development largely bucks the trend. Lately, homes are being built not on the outskirts of the larger metro, but on the fringe of the city itself, in infill locations and on smaller lots.
Houston’s housing stock is among the youngest in the nation. Roughly a quarter of homes in the Greater Houston area have been constructed in the past dozen years. Of the largest 15 metro markets, only Phoenix matches this number. At the other end of the spectrum, only a quarter of homes in Houston were built in 1970 or earlier. At least half the homes in seven of the top 15 metros were built prior to 1970.
To find room for these homes, conventional wisdom says that Houston has developed over time in a somewhat concentric pattern – when more homes are needed, just add another ring a bit farther from the city center each time. But in reality, the current Houston housing stock has grown in a much more irregular fashion, in fits and starts all over the larger metro area (figure 1).
Beginning roughly in the 1920s, each decade of home construction featured a large number of homes built close to the city center, indicating the core of the Houston metro has a diffuse mix of homes by age. But beyond the dense collection of homes near the center, in almost every decade since the 1920s, housing construction has been – literally – all over the map in Greater Houston. The most recent construction has focused on filling in the gaps that remain. Today, homes constructed in these previous development voids are much more uniform in age than other areas of the metro.
The ring of ZIP codes just outside of the city proper that features the newest homes (figure 2) corresponds to the development voids leftover after previous development spurts during Houston’s early growth decades. In these areas, the only homes that exist were built only relatively recently (beginning in the 1980s). This goes against the notion that to accommodate rising populations, Houston has continued to build out. In reality, the metro has largely filled-in and gotten denser.
But even though development has largely been focused on filling in gaps left by previous development spurts, instead of on the vast open land farther from the city, building increasingly large homes even in areas closer to the city center hasn’t been a problem. Houston-area single-family homes have doubled in square footage since 1950. But while homes have been getting bigger, the lots on which these homes are built essentially have not grown at all since the 1950s (figure 3). As a result, the home size-to-lot size ratio has risen over time, another indicator of increased density.
As Houston gets denser, Houstonians may also be showing a greater acceptance for different, more urban housing types. Houston-area homebuyers have increased their appetite for condos. In 2014, condo sales rose 27 percent year-over-year, while single-family home sales fell by 34 percent (figure 4). It’s worth noting that the overall volume of single-family home sales is still much, much higher than the total number of condos sold (34,000 SF homes sold in 2014, vs 2,900 condos), but the divergence is surprising given that condo and single-family home sales have largely moved in lockstep since 2005.
