Oh, Give Me a Home...Please!

It’s way too expensive. There’s often not enough of it where/when needed. Too much of it is of substandard quality. It remains rooted in outdated standards and practices. It is hyper-local. Private equity firms have taken a big interest, driving up prices. Most significantly, its presence or absence has a huge impact on people’s quality of life.

I must be talking about health care, right? No -- housing.

3D printed homes in Austin. Credit: Icon/Twitter

America is in the midst of a housing crisis. Home prices have surged 54% since 2019, and 5.8% in the past year. The National Association of Realtors reports that the median price for an existing single family home is $422,000. A Washington Post analysis indicates that rents have gone up by 19% since 2019. Although increases have cooled lately, Harvard’s Joint Center for Housing Studies says that half of renters spend more than 30% of income on rent, and a quarter spend more than 50%.

Credit: Washington Post

Meanwhile, we’re not building nearly enough homes. Zillow says we’re 4.5 million homes short, while other estimates put the number as high as 7 million. And when builders do build new houses, they’re not focusing on so-called starter homes. Between increases in land and materials, and more prescriptive local regulations, the economics don’t work. “You’ve basically regulated me out of anything remotely on the affordable side,” Justin Wood, the owner of Fish Construction NW, told The New York Times.

New research from the University of Kansas takes a contrarian view: most metropolitan areas have plenty of housing; it’s just that not enough of it is affordable to low income households. “Our nation’s affordability problems result more from low incomes confronting high housing prices rather than from housing shortages,” co-author Kirk McClure said. “This condition suggests that we cannot build our way to housing affordability.”

Whichever side is right, keep in mind that 60% of Gen Z worry they might never be able to afford a home, and 52% of Gen Z renters have struggled to pay their rent. Some 6.7 million households live in substandard homes, “with multiple structural deficiencies or lacking basic features such as electricity, plumbing, or heat.” And, of course, the U.S. has an estimated 653,000 homeless people at any given time.

Improving the housing situation is something that both Presidential candidates agree on, although their solutions differ. Former President Trump believes illegal immigrants are driving up housing costs, so stopping the influx and perhaps deporting millions of them will cause prices to go down. He would also “eliminate costly regulations, and free up appropriate portions of federal land for housing,” according to a spokesperson.

Vice President Harris, on the other hand, wants to build 3 million new units, give first time buyers $25,000, give more tax credits, and “expand rental assistance for Americans including for veterans, boost housing supply for those without homes, enforce fair housing laws, and make sure corporate landlords can’t use taxpayer dollars to unfairly rip off renters.”

They’re talking more about housing than health care.

A 2023 Pew survey found that Americans are broadly supportive of policies to increase housing supply, such as allowing apartments to be built in more areas or making permit decisions faster. They are most keen on such changes in what are now largely commercial areas, rather than in the residential areas they might live in.

That’s NIMBY: Not in My Back Yard. People fear that allowing lower cost homes or multi-family units in their neighborhood might decrease their own home’s value.  NIMBY, of course, is much broader than just housing. We want more manufacturing, but not near us. We need power plants, water filtration centers, and solid waste landfills, but somewhere else. We need places to raise all those cows, pigs, and chickens we eat, not to mention the plants that process them, but, good heavens, the smell! The mess! And, please, please, don’t make us live near poor people.

There is now a countervailing movement, at least for housing: YIMBY. “I could not be more thrilled that every top Democrat in America is becoming a Yimby!” Laura Foote, the executive director of the national Yimby Action group, said on a recent Harris fundraising call. “We have officially made zoning and permitting reform cool! I just want everyone to take that in.”

“What we’re seeing is a generational shift,” Sen. Brian Schatz (D., Hawaii) also said on the call. “If we want to actually solve the problem of the housing shortage, the simplest way is to make it permissible to build.” 

The problem is that federal officials can talk all they want about zoning and permitting reform and easing the permitting process, but that zoning and permitting happens at the local level. As Jerusalem Demsas explains in The Atlantic, California started trying to make it easier to build accessary dwelling units (ADUs) – think mother-in-law suites – back in 1982, but only recently, and after additional legislation, has there been much progress. “Cities are openly flaunting state law to prohibit home building,” says Matthew Lewis, communications director at California YIMBY.

Edward L. Glaeser, a Harvard economic professor, offers a potential solution in a New York Times op-ed: threaten to cut off federal funding if states don’t move “to reduce the ability of communities to zone out change,” much as they forced states to raise their drinking age in 1984 or face loss of highway funds. Moral persuasion doesn’t seem to be working.

Doing nothing is not an option. As David Dworkin, president and CEO of the nonprofit National Housing Conference, told Adele Peters of Fast Company:

West Coast cities have struggled with housing affordability, but now we’re seeing these kinds of problems in Boise, Idaho; Little Rock, Arkansas and Charlotte, North Carolina. And that’s really a game changer. The bottom line is if you don’t want affordable housing in your backyard, you’re going to end up with homeless people in your front yard. And you don’t have to go far today to see what that looks like.

Look, we’re still building homes like it was 1924, not 2024. Where are our armies of robots building them in a day or two? Why hasn’t 3D printing of houses taken off faster and cheaper (as a 100 unit development in Texas has shown to be feasible)? With the current commercial real estate glut, converting those buildings to residential is a win/win. We can do better.

A recent editorial in The Lancet called housing ”an overlooked social determinant of health,” and concluded: “Making housing a priority public health intervention not only presents a pivotal opportunity, but a moral imperative. The health of our communities depends on it.”

So, yeah: YIMBY.