Housing Units Authorized by Building Permits

Definition:

Building permits represent the number of new housing units authorized by building permits in the United States. The building permits data relate to new private housing units intended for occupancy on a housekeeping basis. They exclude mobile homes (trailers), hotels, motels, and group residential structures, such as nursing homes and college dormitories. They also exclude conversions of and alterations to existing buildings.

These numbers provide a general indication of the amount of new housing stock that may have been added to the housing inventory. Since not all permits become actual housing starts and starts lag the permit stage of construction, these numbers do not represent total new construction, but should provide a general indicator on construction activity and the local real estate market.

Scope and Methodology:

Building permits data are based on reports submitted by local building permit officials in response to a Census Bureau mail survey of 19,000 permit-issuing place. They are obtained using Form C-404, Report of New Privately Owned Residential Building or Zoning Permits Issued. Data are collected from individual permit offices, most of which are municipalities; the remainder are counties, townships, or New England and Middle Atlantic-type towns. When a report is not received, missing data are either (1) obtained from the Survey of Use of Permits, which is used to collect information on housing starts, or (2) imputed.

The number of new housing units authorized by county is obtained by directly cumulating the data for the permit-issuing places to counties. Although not subject to sampling variability, data are subject to various nonsampling errors. Explicit measures of their effects generally are not available, but it is believed that most of the significant response and operational errors were detected and corrected in the course of the Census Bureau's review of the data for reasonableness and consistency.

The portion of residential construction measurable from building permits records is inherently limited since such records obviously do not reflect construction activity outside of areas subject to local permits requirements. For the nation as a whole, less than 5 percent of all privately owned housing units are constructed in areas not requiring building permits. However, this proportion varies greatly from state to state and among counties. Any attempt to use these figures for inter-area comparisons of construction volume must, at best, be made cautiously and with broad reservations.