America Built Too Much Storage. Just Not Everywhere.

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  Corridor of closed self storage unit doors in a multi-storey facility

In May 2025, Chicago banned self storage from most of its business, commercial and downtown districts. Fourteen months later Atlanta, the country's busiest storage construction market, stopped issuing permits entirely. Neither city said anything about oversupply. They said something more damaging.

The ordinance Chicago's City Council passed in May 2025 is worth reading closely, because it is not what a developer expects.

Ordinance O2025-0016754 amended the zoning code to prohibit residential storage warehouses in most Business, Commercial and Downtown districts. The use survives only in Manufacturing districts, Downtown Service districts and certain planned developments. Existing facilities became legal nonconforming uses, which means limits on expansion and alteration. In the third largest city in America, self storage is now zoned alongside light industry.

Then Atlanta. Mayor Andre Dickens signed an executive order on June 24, 2026 directing the planning department to refuse new self storage permit and rezoning applications. On July 6 the City Council unanimously passed Ordinance 26-O-1396, a 180-day moratorium. A companion measure, co-sponsored by all fifteen councilmembers, would require a special use permit citywide, on top of an existing prohibition on storage within 500 feet of the Beltline corridor.

Atlanta led the entire country in new self storage construction in 2025, delivering somewhere between 2.2 and 2.4 million square feet depending on which tracker you use. Its response was to stop.

Neither city framed this as a supply problem. The rationale, repeated almost verbatim across dozens of jurisdictions, is that self storage generates few jobs, little tax revenue and no street activity. Delta Township, Michigan put it plainly when it banned storage from commercial zones in 2025. Supervisor Fonda Brewer described self storage facilities as inactive land uses that provide few jobs and represent an opportunity cost that could displace more desirable future development.

That is a different and more serious charge than overbuilding. Overbuilding corrects. A city deciding your asset class is not worth its commercial land does not.

According to the Wall Street Journal, parts of at least fifteen states have imposed bans or tight limits on self storage since 2019. Providence, Rhode Island added self storage to the same prohibited-use list that contains prisons and slaughterhouses.

The number that says everything is fine

Set the zoning against the market data and you get a genuine puzzle.

National supply sits at roughly 7.8 net rentable square feet per person, measured at year-end 2025. The industry's own equilibrium benchmark is seven to eight. By the metric everyone uses, the United States is almost exactly in balance.

New supply is decelerating. Roughly 57.3 million net rentable square feet were completed in 2025, about 2.8 percent of existing inventory. Yardi Matrix forecasts 51.1 million square feet for 2026, which drops new supply to about 2.4 percent of stock, well below the long-term average of 4.2 percent. First quarter 2026 construction starts ran 29 percent below the prior-year pace. The planned pipeline fell 12.8 percent year over year to 114.1 million square feet, and the prospective pipeline fell 21.7 percent to 31.5 million, down more than forty percent from its 2023 peak.

Rates are stabilizing, though the two main trackers disagree on sign. Yardi's annualized rate per square foot turned positive in December 2025 at plus 0.3 percent year over year, the first positive reading after a long decline. RentCafe's blended per-unit measure was still 133 dollars a month in May 2026 and down 2.2 percent year over year, with seventy percent of the 150 largest cities posting annual declines. Different unit mixes, different timing, both worth citing with their labels attached.

The public operators tell a consistent story. Extra Space Storage's chief executive Joe Margolis said on the February 2026 earnings call that the company felt better about its positioning going into 2026 than it had going into 2025, and disclosed that only six percent of its same-store square footage faces a new competitor delivery in 2026, down from thirteen percent in 2024. CubeSmart reported the same trend, with the share of its portfolio facing new competitive supply falling from 24 percent in 2025 to nineteen percent in 2026, a multi-year low. Its chief executive Chris Marr described urban Northeast and Midwest markets as continuing to outperform while supply-hit Sun Belt and West Coast markets showed early signs of recovery. SmartStop's annual report characterized 2025 as occurring against the backdrop of the single largest supply wave in the sector's history.

Public Storage, meanwhile, bought National Storage Affiliates for roughly 10.5 billion dollars in enterprise value, closing in July 2026, bringing it past 4,500 properties and 327 million net rentable square feet.

So: supply in balance nationally, new construction falling, rates bottoming, the largest operator consolidating aggressively. And cities banning the use.

Both of those things are true, and the reason they are both true is a measurement problem.

The finding: the metric is right and the geography is wrong

Net rentable square feet per capita is a sound metric. The problem is that almost everyone quotes it at a geography where it means nothing.

Self storage is a three-mile business. Industry practice measures saturation at a three-mile radius in urban and suburban markets, tightening to one mile in dense urban cores and widening to five or even ten miles in rural areas. Inside Self Storage uses eight square feet per person as the point of equilibrium and applies it at three miles. Storage Authority calls markets below seven undersupplied and above eight oversupplied, applies a three to five mile trade area, and adds a population floor of roughly 30,000 within that ring.

That is the operative geography, because it reflects how far someone will drive to visit a storage unit they are paying for monthly. Nobody crosses a metro to reach a cheaper locker.

Now look at what happens when you measure at state and metro level instead.

Metro Atlanta topped the nation in construction in 2025 and still sits near ten square feet per capita across roughly 54 million square feet of inventory. That number is above equilibrium, which sounds like a clean overbuilt verdict, and it is useless for siting a facility, because it says nothing about whether any particular three-mile ring in the metro is saturated or starving.

Dallas-Fort Worth carries the largest total inventory in the country at 80.7 million square feet and is widely described as overbuilt. It also contains five-mile submarkets with more than 100,000 people and under four square feet per capita, which is half of equilibrium.

State figures are worse. TractIQ puts the District of Columbia at 2.01 square feet per resident, New York at 2.44, Hawaii at 2.78 and Massachusetts at 2.81. Separate 2024 data from Neighbor puts Idaho highest at 12.5 and Hawaii lowest at 3.2. Note that Hawaii appears in both lists at two different numbers, a vintage and method difference rather than an error, and a good reminder of how much these figures move depending on who counts.

Texas illustrates the problem sharply. One source puts Texas at roughly eleven square feet per capita and another at roughly seven. Both are defensible depending on geography definition and vintage. Neither tells you whether to build in Frisco.

A developer writing for Creating Wealth Through Self Storage put the consequence better than any analyst has. Describing a Houston project, he wrote that by the time the expansion began leasing, the trade area registered around thirteen square feet per capita, and that had he seen that number when the deal was first done, he would not have done it.

The trade area registered thirteen. Texas registers seven to eleven. Both numbers describe the same real estate.

So the answer to whether America overbuilt storage is that the question has no national answer. Specific three-mile rings are saturated past the point where a new facility can lease. Others, including rings inside metros everyone calls overbuilt, sit at half of equilibrium. The national 7.8 figure is the average of those two conditions, and averaging them destroys exactly the information a site selection decision requires.

A worked example shows how simple the actual calculation is. A three-mile ring with 30,000 people and 143,000 existing square feet computes to 4.77 square feet per capita. At an eight square foot equilibrium, that ring shows roughly 97,000 square feet of unmet demand. That is a defensible development case, and it can be built in an afternoon for any ring in the country.

The screen you can build, and what it cannot see

Which raises the practical question: can you assemble a county-level supply picture from free federal data, as a first pass before paying for facility-level rings?

Partly. And the limits are as interesting as the capability.

Self storage is NAICS 531130, Lessors of Miniwarehouses and Self-Storage Units. The code survived the 2022 revision unchanged, which is genuinely useful because it means a continuous county-level series exists. It covers establishments primarily renting space for self storage, whether rooms, compartments, lockers, containers or outdoor space, and includes equity REITs primarily leasing such units. It excludes general warehousing, which sits in 493110, and coin-operated lockers, which sit in 812990.

Four free federal datasets carry the code.

County Business Patterns publishes annually, covering establishments with paid employees, at national, state, metro, county, ZIP and congressional district level, with establishment counts, employment, quarterly and annual payroll. The most recent release covers 2023.

The Bureau of Labor Statistics Quarterly Census of Employment and Wages publishes quarterly at six-digit code level for every county, drawn from unemployment insurance records. Most recent annual averages cover 2024. County-level suppression is heavy, with estimates that roughly sixty percent of private county-level data across all industries is withheld.

Nonemployer Statistics is the one that matters most here, and it is the one most analysts skip. Built from IRS business income tax records, it publishes establishment counts and receipts by code at county level, most recently for 2022.

The Economic Census adds revenue by establishment every five years, currently on its 2022 vintage.

Now the limitation, and it is severe.

A large share of American self storage facilities have no employees at the facility. Unstaffed and remotely managed operation is not a fringe practice, it is the industry's economic logic. Operators state directly that facilities under roughly 50,000 square feet cannot support a full-time employee. One operator runs more than 25 facilities across multiple states with no on-site staff at all.

Count the consequence. There are roughly 52,000 physical self storage facilities in the United States. The employer establishment universe recorded in federal business statistics is far smaller, with published estimates running from about 17,000 to about 32,000 depending on source. Which means employer-based federal data may be capturing somewhere between a third and two thirds of the actual physical footprint.

And the undercount is not random. It is worst precisely where you would most want accuracy: smaller, newer and rural facilities, which are the most likely to be remotely managed.

That is why Nonemployer Statistics belongs in any serious screen. An unstaffed facility either shows up there, as a nonemployer establishment, or vanishes into a parent company's staffed headquarters establishment. Employer data alone will systematically tell you a county is emptier than it is.

The recipe, stated plainly. Pull County Business Patterns establishment counts for NAICS 531130 by county. Pull Nonemployer Statistics establishments for the same code and geography. Add them. Cross-check against the Quarterly Census of Employment and Wages county count for the most recent annual average. Where county cells are suppressed, fall back to state totals or impute from employment size class flags, and flag every imputed county explicitly. Multiply the combined establishment count by an assumed average net rentable square feet per facility to estimate county supply, then divide by county population from Census estimates.

Use that to rank and exclude counties. Never to size a site. The undercount and the suppression are both too large, and the geography is still wrong, because a county is not a trade area. Short-listed counties then get facility-level verification and three-mile rings.

What the zoning wave actually changes

Return to Chicago and Atlanta, because the zoning shift alters the development calculus in a way the supply data does not capture.

The restrictions fall into four patterns, and each has a different implication for a site plan.

Outright prohibition in commercial districts. Chicago is the largest example, restricting storage to Manufacturing and Downtown Service districts. Thousand Oaks, California voted in October 2022 to exclude storage from prime commercial areas, confining it to industrial zones and parcels at least 1,000 feet from a freeway and 500 feet from arterial streets, with a special use permit required to build outside those bounds. Lewiston, New York declared storage an unpermitted use in its business and residential-business districts in March 2024.

Moratoria. Atlanta's 180 days is the headline. Coos Bay, Oregon adopted one unanimously in August 2025, its staff report noting the city already has thirteen facilities, more than twice the storage space typically required for a community of its size, and that storage contributes little to job creation, housing availability or street-level activity. Wetumpka, Alabama approved a one-year moratorium in June 2025 and considered extending it. Rockdale County, Georgia imposed 120 days in January 2025. Prattville, Alabama declared one. Elk Grove, California considered a citywide moratorium with a staff report counting nineteen facilities in the city plus four more within two miles.

Distance separation and caps. Cape Coral, Florida permits development only where facilities are at least a mile apart and 500 feet from major intersections. Wildomar, California lifted a moratorium that had stood since December 2010 and then directed staff to prohibit traditional self storage in desirable commercial-general zoning.

Ground-floor active use and design mandates, which is the pattern most relevant to a site planner. Washington, DC keeps storage by-right in production, distribution and repair zones but requires a ground-floor active use, meaning retail, office, medical, arts, pet care, dining or a caretaker apartment, occupying at least half the ground-floor area and one hundred percent of the street frontage. Renton, Washington requires storage to be in a multistory structure, limits it to fifty percent of gross floor area, prohibits it on the ground floor along any street frontage, and requires leasable commercial or lobby space to a thirty-foot depth along the street. Palm Bay, Florida requires ground-floor retail on lower-classified roads or a hundred-foot setback, and mandates at least two high-quality facade materials across at least 75 percent of surface area with a differentiated base. Thousand Oaks requires staggered wall planes with minimum six-inch offsets, roof overhangs for solar shading, deep reveals, and either a caretaker unit or specified security features.

Read that last group again, because it is the operationally significant one. A jurisdiction that requires a storage building to present active ground-floor uses, articulated facades and street-facing leasable space is not banning storage. It is requiring storage to be designed like a building rather than a box, which is a substantially harder site planning and elevation problem than the industry has historically solved.

On the economic rationale, Vancouver, Washington was the most explicit. Its 2019 moratorium turned on the city's employment density goals of 25 employees per acre in commercial zones and eleven per acre in industrial, targets a self storage facility cannot approach. That is the whole argument, expressed as a number: a use that produces almost no employment per acre loses in competition for commercial land whenever a city gets to choose.

One thing not found in the research is worth stating plainly. No instance of state-level preemption overriding a local self storage zoning restriction surfaced. Unlike parking minimums, where eleven or more states have preempted local control, storage developers have no statutory backstop. The litigation that does exist is about pricing rather than land use: New York City sued Extra Space Storage in February 2026 alleging predatory pricing across roughly sixty city locations.

What this means for a site

Four steps, and the sequence matters more than any single figure.

Check whether the use is even permitted before anything else. This has moved to the front of the process. Determine whether the parcel's district still allows self storage, whether the use is by right or requires a special or conditional permit, whether a moratorium is in effect or pending, and whether ground-floor active use or facade standards apply. In Chicago, Thousand Oaks and dozens of smaller jurisdictions, the answer on a commercially zoned parcel is now no, or not without a hearing.

Screen counties on combined federal data, then discard the county number. Use the County Business Patterns and Nonemployer Statistics recipe above to rank and exclude, understanding that it undercounts by a third or more and that a county is not a trade area.

Run the actual ring. Three miles urban and suburban, one mile dense urban, five to ten rural. Compute existing net rentable square feet against population and test against the seven to eight equilibrium. Check the population floor of roughly 30,000 within the ring. Then adjust the effective radius for the barriers that shrink it in practice: freeways, rivers, rail lines, anything a customer will not cross.

Test the parcel against the format the zoning now permits. Single story at 40 to 45 percent coverage yields roughly 17,500 to 19,600 net rentable square feet per acre and rents 80 to 88 percent of what it builds. Multi story stacks several times that on about two acres but drops to 65 to 75 percent efficiency once corridors, elevators and staging are counted. If the jurisdiction requires a multistory structure with ground-floor commercial, as Renton does, single story is not on the table and the efficiency math changes before the pro forma does.

The land competition nobody priced

Storage has spent two decades winning a straightforward argument. It needs no employees, generates no traffic, produces steady cash and finances easily. Every one of those traits made it attractive to capital.

The zoning wave is the same list read from the other side of the table. No employees means no jobs per acre. No traffic means no street activity. Low intensity means a city looking at a commercial corridor and a housing shortage will pick almost anything else.

That is not a supply cycle and it will not correct when rates recover. It is a durable shift in how municipalities value the use, and it arrived at the same moment the sector was digesting the largest construction wave in its history.

The market data says the country is in balance at 7.8 square feet per person. The trade-area data says some rings are at thirteen and others at four. The zoning data says an increasing share of the commercially zoned parcels where a facility would actually lease are no longer available at any price.

All three are true. Only the last one is permanent.

Sources:

• ZoningChicago Ordinance O2025-0016754. City of Atlanta executive order and City Council Ordinance 26-O-1396.

• Coos Bay Resolution 25-29 and staff findings.

• Municipal actions and codes in Delta Township Michigan, Thousand Oaks California, Lewiston New York, Cape Coral Florida, Wildomar California, Washington DC, Renton Washington, Palm Bay Florida, Vancouver Washington, and Rockdale County Georgia.

• Wall Street Journal reporting on the multi-state restriction count.

• Yardi Matrix self storage forecast updates for completions, pipeline and starts.

• StorageCafe for 2025 completions and metro rankings.

• RentCafe monthly reports for street rates.

• TractIQ for occupancy.