Slow housing construction in Chicago area, matching slow population growth

The release of data showing a small population increase in Chicago and the region also included data on housing construction in the Chicago region:

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The number of homes in the Chicago metro area grew by 3.9% between 2010 and 2020, census data made public Thursday shows. That was a slower growth rate than the nation overall, where the number of homes grew by 6.7%.

The slow housing growth was not surprising, as the region recovered from the 2008 housing and financial crisis…

Among Cook and the collar counties, only Kendall County added homes at a higher rate than the nation: 11.6%. It added more homes than any county in the state, likely reflecting the county’s explosive growth in population over the past decade…

The Chicago area’s population growth could be good news for the housing market, inspiring investors and developers to take a deeper interest in the city, Smith said.

Presumably, builders and developers are going to be a bit hesitant to build a lot of units when the population is not growing as quickly. If new demand is limited, why build too many units and risk having lower selling prices? Add this corollary to the growth is good idea in American communities: higher rates of housing construction is a sign of a bright future and a higher status.

I do wonder what percent of homes or residential units need to be replaced each decade. Populations in metropolitan regions expand out – as noted above in Kendall County with double-digit growth – and occupy existing homes and units that may or may not meet their needs. Teardowns are one option, usually limited to wealthier communities where a new home in place of an older one can get a hefty price, but so are denser housing developments, in-fill development, or a change of use for properties (think vacant shopping malls or office parks converted to housing).

Additionally, does this small increase in homes also help address the need for affordable housing? At what price points are these new homes going for? I would guess that at least a sizable percentage of the new homes are out of reach of many in the region.

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