Colorado Springs: New housing construction not keeping up with household creation

With new apartment vacancy data coming out for Colorado Springs, it may be helpful to take a look at household formation versus new unit construction in the Colorado Springs area.

For now, we only have data up through mid 2014, but we can get a sense of the overall trend.

(These numbers are from the Colorado Demography Office and are based on population and household data. The total household number is based on occupied housing unit data, and the housing unit data originates with the US Commerce Dept., and includes both single-family and multifamily.)

In 2014, new household formation and new housing units were fairly even matched.We can see that both increased by about 1.25 percent. Specifically, housing units increased by 1.2 percent while households increased by 1.3 percent (for Colorado Springs):

Not all years are as evenly, matched, though. We can see back in 2010 there was a lot more household growth than there was new unit construction. Back in 2003, there was a lot more housing construction than there was new household growth.

Not surprisingly this reflect what we might have suspected all along — namely that during the housing boom, housing construction was outpacing new household formation, while it has been the opposite since the financial crisis.

To look at this a different way, let's look at the difference between the total number of new units and the total number of new households.

In this graph, for example, we see that in 2014, there were 94 more households formed than there were new units constructed. By contrast, in 2003, there were 6498 fewer households formed than there were new housing units.

Since 2008, this points toward a tight housing market, and will likely mean low vacancy rates, since we know from this that only a small portion of new units have been multifamily (for Colorado Springs):

Colorado in top ten of states in well being index

Every year, Gallup releases its "Well Being Index" which measures the following: 

• Purpose: liking what you do each day and being motivated to achieve your goals
• Social: having supportive relationships and love in your life
• Financial: managing your economic life to reduce stress and increase security
• Community: liking where you live, feeling safe and having pride in your community
• Physical: having good health and enough energy to get things done daily

Out of all US states, Colorado comes in fourth, behind first place Hawaii, then Alaska and Montana. Wyoming rounds out the top five for fifth place. 

Colorado is in the top ten list, yet again. In fact, according to Gallup, "Hawaii and Colorado are the only two states that have made the list of the 10 highest well-being states each year since 2008."

The Western US in general is notable for having high well being scores: 

Why does the West do so well? Well, the stereotypes about Colorado and west are often true. There is a lot of entrepreneurship, physical fitness activity, and community involvement among Westerners. Moreover, homicide rates are low in Colorado (and also in Wyoming, Utah, and Montana) adding to the "community" measure contained within the index for those states.

Climate may be a factor as well. For example, New Mexico, in terms of statistical data, is nearly as unhealthy and low-income as Mississippi. So why does New Mexico rank so much higher by this measure? It may have something to do with perceptions of how much control one  has over one's economic life and physical well being. 

See here for more on this from Gallup.

Colorado among states with largest population growth and in-migration from other states

Last week, the Census Bureau released new numbers on state population growth. If we map the year-over-year population growth rates, it looks like this:

Here, we note that population growth is weak in the Northeast and much of the Midwest, while it is stronger in the South and the non-California West.

Driven by a flight to oil jobs in North Dakota, the growth in ND topped the list with 2.2 percent growth, or 16,800 new residents, which is a lot for a state with fewer than a million people. Colorado gained 100,900 new residents to add to its 5.3 million people in 2014. Meanwhile, New Mexico, Mississippi, Maine, Connecticut, Vermont, Illinois, and West Virginia all lost residents. New York was 16th from the bottom and added only 46,900 residents to its population of more than 19 million.

The Wall Street Journal examined these trends in light of future likely changes to the electoral college. These trends will help states like Texas, Florida, and the Western US gain in influence in national politics.

However, when it comes to looking at whether or not people are moving from other states to these places, this map can be misleading.

In-Migration from Foreign Countries 

Many states with some of the largest population gains over the past year have been gaining population from foreign areas. Among people who were already American residents last year, the first map actually overstates the extent to which people have migrated from other states. Indeed, California, New York, Texas, Massachusetts, and Florida are all being propped up in population growth via foreign in-migration.  If we check the Census Bureau's new data from September 2015 on in-migration from foreign areas, the map looks quite different:

In terms of new residents from foreign countries, Massachusetts tops the list with nearly one in one hundred Massachusetts residents having lived in a foreign country just one year ago. Washington State is close behind, and we can note that Texas, California, Florida, and Virginia growth rates are all fairly dependent on in-migration from outside the US.

Will new immigrants from foreign countries stay put in their initial state of residence? This map suggests that, at least for first generation immigrants, they will. There are many reasons for this, including the fact that the foreign born often like to stay near communities that include other foreign born residents. By the second generation, however, the incentives to stay near immigrant enclaves gives way to incentives to migrate to states with freer economies and more economic opportunities.

State-to-State Migration

If we look just at in-migration from other states (again, from September 2015), we find that California, New York, Texas, New Jersey, Pennsylvania, Illinois, and the Great Lakes area in general have attracted relatively few migrants from other states.

The most attractive areas have been the more rural areas of New England, the Carolinas, and the West, not including California or Texas. If it weren't for foreign migration, much of the North would have flat or negative growth rates:

In some areas, much of this has been driven by a boom in oil jobs, and workers have relocated to states that offer the relatively-high wages that oil-extraction jobs offer.

In North Dakota, for example, more than 5.3 percent of the population lived in a different state a year earlier. Alaska was similar with a rate of 5.2 percent coming from out of state over the past year. Idaho, Hawaii, Nevada, Wyoming, and Colorado all also showed more than 4 percent of their populations coming from other states over the past year. In California and New York, however, only 1.3 percent of residents had recently arrived from out of state. In Texas, 2.0 percent had recently arrived.

This also follows a longer trend in which Americans have been moving from the old population core of the Midwest and Northwest, and been moving South and West.

In terms of homicide, Colorado among the safest places in North America

As I explained here, I think it's useless to speak of indicators like poverty or homicide in terms of a huge place like the US or Mexico. Regional differences are so large, and so many demographic variables are different form place to place, that it's useless and even dishonest to make such comparisons.

So, I prefer to look at things at the state level, or preferably at the metropolitan-area level, if the data is available.

People often speak of the US homicide rate as being unusually high, but that really relies on a couple of mistakes in examining the data. First, those who say such things usually make the arbitrary choice of excluding any country in the analysis except the so-called "developed countries" by which they really mean Western Europe. To do this, of course, excludes a huge portion of humanity, and there's no reason why a country not currently at war, like Brazil or Russia, for example, should be excluded from the analysis. (Both have much higher homicide rates than "the US," by the way) The other mistake is to compare a country the size of Finland (with 5 millions people in essentially one metropolitan area) to the United States with 320 millions people and dozens of large metro areas.

So, if we drill down a bit more, we see quickly that high homicide rates are really a regional issue in the United States, and not a nationwide issue. Let's look at both the US and Canada together:

We quickly find that the Northern US is quite comparable to Canada, which has a reputation for being remarkably safe. . And we also see that Colorado is in the second-to-lowest —low being good— category for homicide rates.

According to 2014 FBI homicide data, Colorado has a rate of 2.8 per 100,000. That puts it about equal with Alberta at 2.52 per 100,000 and Wyoming at 2.7 per 100,000. The lowest homicide rates in the nation was in New Hampshire with a rate of 0.9, and the highest was in Louisiana at 10.3. In Canada, there was a much smaller spread with the lowest rate found in Quebec at 0.86, and the highest was in the far north where homicide rates among the small populations there exceeded 10 per 100,000 in Nunavut and 8 per 100,000 in the Yukon.

The chart shows a more exact comparison among the states and provinces (Canadian provinces in red):

Moreover, we might note that Colorado is also among the safest places in the Western Hemisphere since homicide rates in the Caribbean and South America tend to be much higher than even the American South.

Homicide Rates in Mexico, by Region

As I noted here, and here, I'm not a big fan of speaking about demographics or trends at the national level when we're talking about a large country with large regional differences. It's nonsensical to  speak about "the United States" as if the 318 million people in the US lived under similar conditions and were affected by identical demographic trends.

The same is true of Mexico, which has nearly 120 million people and displays very large regional differences, especially from north to south. The south is densely populated and tends to be poorer. The north is more sparsely populated and tends to be richer. Culturally, there are big differences. Chiapas, for example is mostly populated by people descended from Indians, while Chihuahua has a slight majority of  "whites" descended largely from migrants of German, Spanish, and French origins (among others).

So, given that Mexico has a reputation for a remarkably high murder rate right now, I thought we might look more closely at this indicator. I mentioned this metric a bit in this post, but thanks to this data from the OECD, we can list by region the homicide rate in each Mexican state (from 2013 data).

Mapped by state, this is what it looks like:

Here's a map to help you identify the name of each state:

The biggest factor in the homicide rate in Mexico right now is the War on Drugs. It's a huge factor, so it's not a coincidence that the states that border the USA are some of the worst, in terms of homicide. Other high-murder states, such as Guerrero and Sinaloa are also notable for being connected to the drug trade. Gone for now are the days of seemingly endless crowds of happy tourists in Acapulco in Guerrero state.

Most Mexicans, however, live in states where the homicide rate is relatively low. Moreover, places where you're likely to vacation, such as Baja California Sur (i.e., Cabo), Vercruz, Jalisco (i.e., Guadalajara), and the Yucatan region are relatively low-crime areas.  Indeed, most of southern Mexico has a homicide rate of around 10 or less per 100,000. If that seems like a lot, remember that the US homicide rate in the 70s and 80s was around 9.5 per 100,000, and it was over 10 in many US states at the time. Even as late as 1995, the US overall homicide rate was over 8 per 100,000. Somehow, we lived through it. This isn't to say that homicide is not a serious problem in Mexico. It's just important to have perspective.

Where people live in Mexico:

And just as a final note, it's interesting to see that drug murders often come along with higher GDP per capita. Are the two related? In some ways yes, because the same factors behind the international trade that makes northern Mexico wealthier are also important factors to international drug runners: