The pace of housing construction should match the pace of population growth.
Homebuilders in Lawrence appear to be building more housing than we need. From 1990 to 2000, the population rose by 22%. During the same time period, the housing stock grew by 27%, 5 percentage points than the amount needed to support the population growth. Note that the 27% growth in the stock is net growth, new units minus units demolished. Thus, the surplus growth was beyond the growth needed to cover losses of older units.
Current statistics suggest that the population growth rate is declining. The Census Bureau believes the City's growth rate has slowed from 2.0 percent per year to less than 1 percent per year. Yet, current building permit data suggest that housing is still being built at a rapid pace.
What is the harm?
Widespread vacancies lead to reduced investment, especially in rental properties. Older neighborhoods lose population as households leave older neighborhoods and move to new, unneeded subdivisions. Neighborhood schools close. Property values fall. The new investment in maintaining homes in older neighborhoods declines.
What is the benefit?
There a benefit from overbuilding. Home prices and rents fall or fail to rise as fast as they might otherwise. This is helpful for homebuyers and people who rent. However, everyone has an interest in the overall stability of the community. Once a household buys a home, that household has an interest in price stability rather than price decline. Similarly, renters have an interest in the long-terms health of the rental stock. If rents are held too low for too long, landlords reduce maintenance expenditures, lowering the quality of the rental stock.
Everyone--both owners and renters--have an interest in price stability. This means allowing the housing stock to grow at a pace that is sustainable, a pace that matches the population growth.
Achieving this is not hard. It simply means monitoring the growth in population and pacing the rate at which new subdivisions are approved. It is clear that depending upon the developers to set this pace will lead to long-term oversupply of homes. This is what was done all through the 1990s and into the current decade. Now that population growth appears to be slower than experience in the past, it is important that we reign in the pace of growth of housing development. Out goal is to have it match the pace of growth of population so as to not harm existing neighborhoods and to channel some of the growth back into existing neighborhoods.