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Tear Downs Are on a Tear

Soaring home prices, shrinking inventories of homes for sale and a dearth of available lots for new home construction, especially in urban and close-in suburban locations, are creating a bull market for tear downs across the nation.

Approximately 7.7% of single-family home starts in 2015 were attributable to tear-down related construction, according to the latest estimates from National Association of Home Builders. Tear-down starts refer to the building of a home on a site where builders tore down an existing home to make room for a new one. NAHB estimates that last year some 55,000 single family homes were torn down to be replaced by new construction.

Tear-down construction has become a significant trend in markets where the lack of available lots in desirable locations is driving up prices.  Tear downs are on a tear in the Los Angeles market, the New York City metro, the Pacific Northwest and throughout the Southeast, which accounted for 28,600 teardowns last year,– about 52% of the US total.

In Houston, permits for tear downs are up 22 percent this year.  Tear downs made news last month when a Houston house was torn down by mistake.  The demolition company blamed Google Maps for the error when they tore down a house that was a block away from the one that was supposed to be demolished.

Pressure to tear down aging single-family homes and replace them with new construction may be greatest in the Northeast, which has the nation’s oldest housing stock.  Many of its desirable locations are in densely settled cities, or near the ocean, where buildable open space is limited.

In Princeton, New Jersey, for example,  tear down are becoming commonplace.  “Tear downs are a result of a dearth of vacant lots,” says Neal Snyder, Princeton’s tax assessor. “There was a downward trend in the late 2000s, but now there is a boom with builders coming in and new homes being bought and sold.  Homes are appreciating Princeton, and as they do, the ratio I use to assess property taxes goes down.”

Tear downs also replace aging, outdated and potentially unsafe housing with modern homes built to code.  Newer homes are more energy efficient,  better insulated, use less electricity, meet current fire safety and construction codes and are wired for today’s cable, phone and appliance requirements.

Not everyone is happy about the tear down trend.  “Across the nation, a teardown epidemic is wiping out historic neighborhoods one house at a time. As older homes are demolished and replaced with dramatically larger, out-of-scale new structures, the historic character of the existing neighborhood is changed forever. Teardowns radically change the fabric of a community.  Without proper safeguards, historic neighborhoods will lose the identities that drew residents to put down roots in the first place,” says the National Trust for Historic Preservation. In 2002, the National Trust began putting “Teardowns in Historic Neighborhoods” on its list of America’s 11 Most Endangered Historic Places.

Preservationists are fighting tear downs by reducing or eliminating the economic pressure.  Popular tactics include changing zoning and land-use regulations to limit the size, placement, and square footage of a new house and new procedures for approvals, such as design review and conservation overlay districts to address the construction of replacement homes.

Counters the National Association of Home Builders:  “Teardowns frequently are said to have breathed new life into old neighborhoods and discouraged suburban sprawl.  Revitalizing older suburban and inner-city markets and encouraging infill construction is universally accepted as good public policy. Infill development, done wisely, can take advantage of existing infrastructure; provide higher densities in locations where mass transportation is already in place, and integrate new housing into the fabric of the community.  Even in the most historic of neighborhoods, structures that do not contribute to the overall character of the area are candidates for replacement with higher-quality, better-designed homes.”


  1. Much appreciated for the content and for posting!

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