This article was originally published on April 5, 2024 in THE WEEK.

High prices and a lack of supply are putting the dream of homeownership out of reach for millions of Americans. 

How severe is the housing crisis?

Economists estimate the U.S. has any- where from 2 million to 7 million fewer homes than it needs. To fill that gap and to keep up with population growth, at least 1.5 million homes would have to be built every year, a benchmark the country hasn’t hit since 2008. With demand far outpacing supply, prices have rocketed beyond the reach of many Americans— especially the young. The median exist- ing single-family home now sells for $384,500, up 6 percent year over year and about 88 percent in a decade, while the age of the typical first-time homebuyer has gone from 31 in 2014 to 35 today. Rent has also become more expensive, climbing nearly 30 percent since the start of the pandemic to a nationwide average of $1,959 a month. The fast-rising cost of housing in part explains the U.S.’s surging homeless population, which climbed 12 percent in 2023 to a record 653,000 people, and why so many lower- income Americans have not felt the benefit of the booming post- pandemic economy. After 26-year-old community college employee Katie Salmonson lost her $900-a-month apartment in Ellenville, N.Y., last year, she and her family had to settle for a cramped, $2,000-a-month trailer. “I just needed a roof over my kid’s head,” Salmonson said. “It just makes me want to cry.” 

Why is there such a shortage of homes? 

The roots go back to the 2008 financial crisis. As home prices sank during the Great Recession, so did the construction of new hous- ing units, with the U.S. adding fewer single-family homes in the 2010s than in any decade since the 1960s. When the pandemic hit, that shortage of new builds combined with near-zero interest rates, supply-chain snarls, and an exodus from big cities to send home prices rocketing. Economists thought prices might fall when the Federal Reserve hiked interest rates to curb inflation, which in turn helped push 30-year mortgage rates above 8 percent in 2023. Instead, owners held on to homes they’d refinanced at super-low rates, and competition for the limited num- ber of properties on the market remained fierce, propping up prices. The market has only been made hotter by the growing presence of institutional investors, which sometimes snap up entire neighborhoods to flip or rent out. Such investors were behind a quarter of all single-family purchases in June 2023. Ordinary people are “bidding against the billionaires of America,” said Sen. Jeff Merkley (D-Ore.) “It’s driving up rents and it’s driving up the home prices.”

Is the problem worse in some areas?

It’s especially severe in major coastal cities, which have long failed to build enough supply to house new arrivals. In the San Francisco Bay Area, where the median single-family home now sells for $1.1 mil- lion, only one new single-family housing unit permit was issued for every 21 new jobs created last July. The nationwide historical average is one permit for every two new jobs. But the housing shortage is no longer just a big-city problem, in part because of the flood of city dwellers who moved to suburbs, rural communi- ties, and affordable metros during the pandemic. Montana added some 40,000 residents from 2020 to 2022, but only 8,700 new homes. That disparity caused average home prices to spike 60 percent to more than $450,000. Median home prices in Utah-another state that saw a Covid-era boom in arrivals-now top $500,000, and 4 out of 5 Salt Lake City homes are unaffordable for an average earner there. The housing shortage has become “a crisis in red parts of the country, rural parts of the country,” said former Housing and Urban Development Secretary Shaun Donovan, “in places where it’s never been an issue.”  

What can be done?

The YIMBY movement (short for “yes in my backyard”) argues that communities need to scrap NIMBY (“not in my backyard”) policies that make it hard to build apartment buildings, townhouses, and neighborhoods filled with smaller, more affordable houses. About 75 percent of urban and suburban residential land is zoned exclusively for single-family houses, and some suburbs mandate minimum lot sizes and even minimum house-height requirements. Supporters of those rules say they protect a community’s “character,” an argument Yimbys say has racist and classist implications. Yimbys have made some headway: At least five states, along with cities such as Minneapolis, Austin, and Salt Lake City, have recently voted to curtail exclusive single-family zoning. But there has been resistance. New York Gov. Kathy Hochul last year abandoned a plan to man- date the building of more housing units near transit hubs following a suburban backlash. “One of the tricky parts of housing politics is that a lot of Americans sincerely believe that their city needs more housing,” said Salim Furth of George Mason University, “but are then unenthusiastic about any specific housing development on their street.” 

YIMBY’s strange bedfellows For years, the YIMBY movement was dominated by young liberals who saw single-family zoning as a barrier to greener, denser, more diverse neighborhoods. Conservatives, mean- while, rejected their plans as an assault on what Donald Trump called the “Suburban Dream Lifestyle.” But that partisan divide is starting to shrink. Montana’s Republican Gov. Greg Gianforte, who signed an inclusive zoning law in 2023, spoke at this year’s YIMBYtown conference, which was also attended by members of the conservative group Americans for Prosperity. Right-leaning Yimbys tend to frame zoning reform as a salvo against Big Government and for laissez-faire capitalism. But as political polarization increases, both YIMBY factions are wary of publicly touting their cooperation. “I have a great fear that land use and property rights will get coded left,” said Chance Weldon of the conservative Texas Public Policy Foundation. “A lot of times people will support or oppose something just because of who’s attached to it.” 

Is zoning reform the only remedy? 

By itself, it won’t solve the housing crisis. Construction costs remain high, the price of materials jumped nearly 30 percent from 2020 to 2022, and the home-building industry is short some 700,000 workers. Thickets of regulations-some arbitrary, but many that protect residents’ health and safety can mean the journey from project proposal to completion lasts years. And simply loosening restrictions will not guarantee that housing will be built where demand is highest, and with access to basic services such as municipal sewer and water systems or schools and hospitals. When it comes to tackling the housing shortage, said urban planner Alexander von Hoffman, “laws against single-family zoning are but the first steps in a long march.” 

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