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Any homebuyer in the housing market today can attest to the shortage of homes for sale, and the need for more inventory – including for newly built homes.
The problem is that builders aren't putting them up fast enough to meet the demand. And a new study seems to confirm that.
Homebuilders in the Buffalo Niagara metropolitan area are constructing houses at the second-slowest growth rate of any large city in the country. That is according to a report by Inspection Support Network that looked at which U.S. cities are building the most homes, based on data from the U.S. Census Bureau and Zillow.
A new home under construction in the new Aurora Mills patio homes development off Mill Road in East Aurora, Wednesday, March 2, 2022. (Derek Gee / Buffalo News)
The research firm found that for every 1,000 existing homes in the Buffalo area last year, there were 2.9 new housing units authorized for construction – compared to 12.5 nationally. That's less than one-fourth the pace of activity locally, versus the country as a whole.
Worse, it was down 8.3% from 3.2 new units per 1,000 existing in 2019, while the national average was up 25.3% from 10.2. That means the gap has widened in the past three years – even though interest rates were at record lows until just a few months ago, and demand is at an all-time high. In all, 1,553 new housing units were approved in 2021 locally, compared to 1,693 in 2019.
Nationally, cities in fast-growing states in the Mountain West and Sun Belt regions – such as Utah, Idaho, Colorado, Texas and Florida – were among the leading metro areas for new home construction. The cities with the fastest growth reported about 60 or more new units per 1,000.
Certainly, a shortage of workers and the continued supply-chain disruptions are big factors in delaying construction, as builders can't get all the materials, windows, doors or even appliances they need, which holds up the completion of homes for months at a time. The lack of enough available and shovel-ready land is another problem, especially locally, and municipal regulation throws in yet another monkey-wrench, builders say.
According to Freddie Mac data cited in the report, the U.S. has an estimated housing supply shortage of 3.8 million units, but the cause isn't recent. Rather, there's been a decades-long decline in single-family home construction since the 1980s, especially for starter homes, as costs have risen so much that it is almost cost-prohibitive to build the lower-end homes that are now in the most demand, particularly for millennials.
And it only got worse after the 2008 recession, as annual housing permits fell to historic lows when the housing market cratered, and they have only gradually recovered.
Want to know more? Three stories to catch you up:
• Where homebuilding is hot, and where it's not
• Local homebuilders are busy - but they could be busier - as shortages hold them back
• Soaring prices, supply delays wreak havoc on new homes and renovations
Welcome to Buffalo Next. This newsletter from The Buffalo News will bring you the latest coverage on the changing Buffalo Niagara economy – from real estate to health care to startups. Read more at BuffaloNext.com.
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Ralph C. Wilson Jr. Centennial Park
Then: Starting with the Imagine LaSalle initiative, city officials have been working for nearly four years on a planned transformation of LaSalle Park on Buffalo's West Side into the new Ralph C. Wilson Jr. Centennial Park, using a $50 million gift from a foundation of the Buffalo Bills' former owner to create a signature park.
Plans include better waterfront access and shoreline support, a new pedestrian bridge linked to the adjacent neighborhood, a new playground, bicycle and walking trails, enhanced sports fields, an athletic loop, a lagoon, a dog run and new landscaping. The effort is led by the Buffalo Urban Development Corp., working with the University at Buffalo Regional Institute, designer Michael Van Valkenburgh Associates, engineering firm Wendel Companies and project manager Gardiner & Theobald.
Now: Despite delays, including from Covid-19, work has progressed from design and engineering to pre-construction phases. BUDC has also received additional funding from the Great Lakes Commission to support engineering work for shoreline restoration, including $1 million in June 2020, another $238,000 in July 2021, and this week added a third grant of $874,783 for the first phase of construction for shoreline elements at the park.
Complete construction documents are expected to be finalized by August, and officials have selected Gilbane Building Co. as the construction manager for the project. A ground-breaking has been scheduled for July 19.
What: BUDC also received a $75,000 award from Empire State Development Corp. to support a waterfront streetscape placemaking plan to better connect Canalside to the new Centennial Park. The goal is to provide more walkability and multi-modal transportation links to bridge the distance.
Tell me more: Additionally, BUDC is also working on streetscape enhancements and placemaking on Court and Ellicott Streets, in conjunction with the Project for Public Spaces, the Department of Public Works and GoBikeBuffalo. The latter effort, on Ellicott, includes lighting the underpass of the Central Library in downtown Buffalo and pedestrian-friendly elements at the Ellicott intersections of William Street and Broadway.
Why it matters: The placemaking project is part of the city's Race for Place initiative, designed to make downtown Buffalo and surrounding neighborhoods more attractive, appealing and welcoming for younger workers and dwellers as Buffalo seeks to grow its urban population of both residents and employers.
Catch up on the latest news from Buffalo Next:
Niagara Falls Mayor Robert Restaino has a vision to create a $150 million "gateway" park downtown, with an ice rink, indoor arena and outdoor amphitheater, but the 12 acres of land he's eyeing for the proposed Centennial Park is owned by Howard Milstein's Niagara Falls Redevelopment, and his firm isn't interested in selling it.
Chinnici's Legacy Development is proposing to construct a pair of large new apartment buildings on a 6.1-acre site on McKesson Parkway, off Union Road, in Cheektowaga.
Kaleida Health and two major unions have agreed to a second extension of their existing contract, which was set to expire May 31 before the two sides extended it until June 30, as they try to iron out a new collective bargaining agreement.
The push to redevelop the LaSalle Metro Rail station and surrounding acreage is generating more interest than any previous real estate bid by the city, as 10 developers or groups submitted responses to the city's "request for qualifications" in early May.
A request by the developers of Elmwood Crossing to amend the original planned-unit development regulation that governs the zoning for the $150 million project is being met with heightened scrutiny and concern from neighborhood residents
A new Dollar General store is coming to the Larkinville area on vacant land at E. Eagle Street, after the Buffalo Planning Board gave a green light Monday to plans by developer Broadway Group for a new discount retail location.
Young Development has a pair of apartment projects underway in Cheektowaga that will add 430 units as part of the construction of the $15 million Town Center Apartments and $75 million Midtown Apartments.
The development firm owned by Carl and William Paladino is hoping to create 300 to 400 units of affordable housing in the city in the next couple of years – a significant increase compared to the limited holdings it now has in that arena, said William Paladino, the company's CEO.
William Harvey Jr. is bringing a steady hand to Northwest Bank as its interim leader, after the company's CEO died unexpectedly in late May. The Pennsylvania-based company has 22 local branches.
The Erie County Legislature voted 8-3 to approve SUNY Erie Community College’s proposed $98.6 million 2022-23 budget, but even legislators who voted for it pledged to play a watchdog role in the spending of the money and implementation of needed cost-cutting measures.
Four reads from Buffalo Next:
1. How community developers can build up neighborhoods: With the support of SAA-EVI, and investments from two national nonprofits, passionate locals are seeking to transform neighborhoods from the bottom up – by starting small but dreaming big.
2. Jeff Gingerich will become the first non-Catholic to lead St. Bonaventure University: Growing up Mennonite on an Iowa farm – living simply and serving the marginalized – set the stage for his career in education and role as the 22nd president at the nation's oldest Franciscan college.
3. Companies large and small are taking a harder look at how much office space they need: Many employees prefer working remotely, and are doing so productively, which can leave employers paying for a lot of leased space sitting empty.
4. New Western New York tech boot camp: 'A shining example of the power of diversity': Buffalo's Tech Academy Data Analytics Bootcamp, the first of its kind in Western New York, has its first graduates. The initiative aims to build a tech workforce that represents the area's diversity and fills the needs of local companies.
The Buffalo Next team gives you the big picture on the region’s economic revitalization. Buying a building? Redeveloping a property? Got a tip? Reach Real Estate & Development reporter Jonathan D. Epstein at 716-849-4478 or email him at jepstein@buffnews.com.
Email tips to buffalonext@buffnews.com.
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I've been a business reporter at The Buffalo News since 2004, now covering residential and commercial real estate and development amid WNY's resurgence. I'm an upstate native, proud to call Buffalo my home, and committed to covering it thoroughly.
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Buffalo Bills and Sabres co-owner Kim Pegula is "progressing well," according to a statement released by the teams.
Four days after retiring from the NFL, Rob Gronkowski joined one of his four brothers, Dan, and dozens of others to work out at Fountain Plaza in downtown Buffalo.
A 60-year-old woman found dead early this month in her East Amherst home was fatally stabbed by her boyfriend following an argument, authorities said Monday.
Investigators are working to identify the body and notify family members, they said.
The Niagara Town Board voted in favor of a 27-page "negative declaration" that no potentially significant environmental impact would stem from the proposed $300 million project.
Luis Marrero, was fatally shot May 4 in an apartment on Donovan Drive in the Ferry-Grider Homes, Buffalo police said. He was 39. Police found Jalia Marrero's body 33 days later in a wooded area behind a commercial plaza on Delaware Avenue, south of Kenmore Avenue.
Jessica Pegula told reporters at Wimbledon on Wednesday that her mother, Bills and Sabres co-owner Kim Pegula, is "doing a lot better now."
The 828-foot-long Stage 4, which took two years and $3 million to build, is longer than any in the movie-making mecca of Hollywood.
Two people were struck by gunfire Tuesday near Delaware Avenue and the westbound exit of the Route 198 Scajaquada Expressway, according to a spokesman for the Buffalo Police Department.
“The decision to not open our outdoor pools this summer came down to the safety and welfare of our residents," Mayor Byron Brown said in a statement.
A new home under construction in the new Aurora Mills patio homes development off Mill Road in East Aurora, Wednesday, March 2, 2022. (Derek Gee / Buffalo News)
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