With outsourcing and unemployment dominating headlines over the past few years, wouldn’t it be nice to hear that two sectors of the U.S. economy have not only stayed strong throughout the recession, but are expected to grow even more over the next 10 years? That’s exactly the case with education and health care. Not only are these sectors shaping the U.S. job market; they’re creating a housing boom in cities with high numbers of hospitals and universities. “The education and health-care fields are the two most consistent job producers in the nation’s economy,” says Greg Willett, vice president of research and analytics at Carrollton, Texas–based MPF Research.
The Bureau of Labor Statistics reports that the health-care sector alone will generate 3.2 million new wage and salary jobs between 2008 and 2018, mostly due to rapid growth in the elderly population. And growth of 12 percent is expected in the educational services industry over the same period. As a result, multifamily owners are starting to offer affordable, quality housing for growing numbers of health-care and education workers in cities including New Haven, Conn., where education and health services account for 28.3 percent of total jobs; Albuquerque, N.M. (15.9 percent); and New Orleans (14.9 percent).
In New Haven alone, there were 541 permits for 5+ structures in 2010, according to the Census Bureau. And in the McAllen-Edinburg-Mission area of Texas, where education and health care make up 26.1 percent of jobs, 297 permits were pulled in 2010. “At a very basic level, simple population age distribution tells a huge part of the story for the eds and meds sectors,” Willett says. “Kids and young adults obviously fill our classrooms, while those in the Baby Boom and the preceding Silent Generation are core consumers in the health-care system. Those groups together account for about three-fourths of everybody in the U.S.”
And there’s another piece to the puzzle, says Ron Witten, president of Dallas-based Witten Advisors. “Wages in this segment tend to be mid-level, suggesting that, from an affordability standpoint, apartments may be a more popular choice vis-à-vis homeownership,” he says.
And with more employees in these sectors expected to rent, Ryan Severino, senior economist at New York–based Reis, agrees that education and medicine will continue to influence the rental market in upcoming years.
“Even with the advent of things like online educational resources, cybermedicine, and medical tourism, these industries are more insulated against competition from technology and cheaper labor around the world,” Severino says. “It’s unlikely they’d experience the erosion in jobs that has occurred in other sectors of the economy that were vulnerable to [these threats].”