When local data on new construction isn’t reported to the Census Bureau’s Building Permit Survey or is inaccurate, a community’s annual population estimate can be affected. We can help correct it.

The chief building official in each community is charged with ensuring compliance with building and development codes in the area. Ensuring the health and safety of building occupants is of foremost concern, but their offices also report the number of new dwellings within their jurisdiction to the U.S. Census Bureau’s Building Permit Survey (BPS).

Building activity is an important gauge of growth and development at the local level and in aggregate those reports are an important economic indicator for the state and nation.

Those same permit reports are also a direct input to annual population estimates for cities, towns and unincorporated areas. So, when they are not reported or are incomplete, they can adversely affect the population data that is produced about a community.

Figure 1:  Many communities in Tennessee report information about the number of new housing units constructed, the value of those improvements, and the number of units in each building to the U.S. Census Bureau’s Building Permit Survey. The number of communities in the state reporting data for each month has fallen since the first half of the 2010s. This has led to an increase in the number of new housing units that are imputed (estimated) by the Census Bureau. These estimates can adversely affect municipal population estimates.

The Tennessee State Data Center is offering communities a chance to review annual housing unit totals in the Building Permit Survey to check for missing, incomplete or inaccurate data that was reported between 2019 to 2023. Corrected data will be reflected in the next Census Bureau Population Estimates vintage for counties, cities and towns scheduled for release in May 2024.

Those same estimates become controls for the American Community Survey, providing important economic, social and demographic characteristics for Tennessee communities.

Building Permits and Population Estimates Explained

At state and county levels, building permits are not used to estimate population. At this scale, a sophisticated method known as a cohort-component model is used. It measures changes since the last census using data on births, deaths, and both domestic and international migration.

But at the subcounty level, housing unit counts come into play. The number of housing units in each city, town or unincorporated parts of a county are used in conjunction with the average number of people per housing unit, to “apportion” the county’s population estimate.

The initial proportions in each subcounty area are established by the count of housing units from the 2020 decennial census. Those proportions change each year based on the number of housing unit additions and demolitions reported in the Building Permit Survey.

Figure 2: Population Estimates Methodology for Subcounty Areas (Cities, Towns, Unincorporated Areas)

Steps 1-3 are repeated for each year in the population estimate data vintage

Source: Methodology for the Subcounty Total Resident Population Estimates (Vintage 2022), U.S. Census Bureau, 2023

Refining Subcounty Population Estimates: Uncovering and Correcting Errors in Building Permit Data

The Tennessee State Data Center, serving as the liaison to the Census Bureau Federal-State Cooperative for Population Estimates, offers the Housing Unit Review program. Through the program we provide resources that communities can use to identify and correct missing data, inaccurate reports or assumptions that can adversely affect annual estimates for cities, towns and unincorporated parts of counties.

Broadly, there are three types of issues stemming from building permit reporting that can impact local estimates and that can be resolved by participating in Housing Unit Review.

Housing Unit Review provides an opportunity to address estimate inaccuracies that can arise from these errors. One of the most common sources of error occurs when a community’s building permit survey reports are missing or incomplete. When this occurs, the Census Bureau imputes or estimates the number of new housing units constructed based on data collected in prior years and trends in the southern United States.

Those imputations can become the source of significant population estimate error at the local level, so they are highlighted in the State Data Center’s Building Permit Survey Dashboard. Annual data for each local governmental unit that reports to or participates in the BPS is included on the site with breakdowns showing the number of reported and imputed building permits.

Figure 3: The TNSDC Building Permit Survey Dashboard shows the number of reported and imputed residential housing permits for cities and counties in the state. When the number of permits is not known due to partial or incomplete reporting, it is estimated and can adversely affect annual population estimates. The dashboard can be used to identify areas of the state where the Housing Unit Review would be beneficial. Data from the past decade are available in a separate interface.

Estimates dating back to July 1, 2020, can be revised through the Housing Unit Review program, provided that local building permit figures are available. That’s because the Census Bureau’s Population Estimates are based on “vintages”, where each year’s release represents a new edition of the time series dating back to 2020 that incorporates new and revised data inputs.

Correcting Errors:  Submitting Housing Unit Review Data

Although the State Data Center coordinates submission of Tennessee’s Housing Unit Review for participating counties and municipalities, local governments across the state hold the data that can be used to improve the reliability of the subcounty population estimates.

For those communities that have preliminarily determined that participating in Housing Unit Review may be beneficial, the next step is to contact the State Data Center. In response, we’ll provide local government officials with:

• Additional housing unit data that can be used to help evaluate if building permit-related issues could have caused estimate errors
• A template and instructions for submitting permit counts for new residences, mobile homes and demolitions.

Interested communities should also prepare tallies of building permits using their internal permit database to enable comparison between local totals and the Census Bureau’s annual housing unit estimates.

Figure 4: Types and date ranges of local permit data that should be compiled for Housing Unit Review

These counts will be used to determine if the Census Bureau’s estimated housing unit change data should be overridden with local values.