A recently released report by the U.S. Environmental Protection Agency (EPA) indicates that residential building permits have increased in central-city and older suburb communities in more than half of the nation's largest metropolitan areas, reflecting a fundamental shift in residential construction. Obsolete, underutilized, and abandoned properties are increasingly being replaced by multifamily residential developments.

"Residential Construction Trends in America's Metropolitan Regions" assessed building trends in the 50 largest metropolitan areas from 1990 to 2007 and found that central cities more than doubled their share of permits in 15 regions. The past five years have shown particularly dramatic increases, and based on data from 2007, the report shows that the trend will continue despite the housing downturn. Notably, while single-family housing units declined most sharply in 2006 and 2007, multifamily construction has dropped less dramatically. Construction of rental units increased slightly in 2007 over the previous year; declines in condo development are similar to those of single-family units.

According to the EPA, this trend reflects a higher appreciation for smart growth that reuses previously developed urban land and buildings, protects the quality of air and water, and preserves natural lands and ecologically important areas. Also driving the trend are lower crime rates and changing demographics within urban cores, as well as a greater desire for walkable communities. However, the report suggests that the trend—while significant in some regions—has not had a substantial impact on urban America as a whole. Most new residential units are built on previously undeveloped land on urban fringes, EPA reports, and less than half of all new residential units are built in urban core neighborhoods in most regions.

To download the full report, click here.