We need to address the housing supply crisis
Housing costs have ballooned, far outpacing the broader cost of living in the U.S. Renters devote more and more of their already limited budget to housing costs and home ownership feels out of reach for many Americans. One key reason for this is the dwindling housing supply across the US.
Addressing the housing crisis is a bipartisan issue. Officials at all levels of government want to ensure that the communities and families they represent have a chance to feel secure in their own home and future. FAS launched our housing policy challenge to uplift ideas that can tackle the crisis and boost housing supply across the country.
The causes of the housing supply crisis are many. Local regulations against density are the main barrier, but there are a host of other important factors. To list a few:
- the difficulties of constructing and organizing public transit systems,
- incentive misalignment for project developers,
- a scarcity of available land in urban areas,
- underfunding of public housing resources,
- lack of access to financing options,
- supply being snatched up by large institutional investors,
- a lack of support for novel arrangements like ADUs and manufactured homes,
- the persistent effects of redlining, and many more.
These challenges to home supply are some of the areas where creative policy thinking could have a meaningful impact. We think the federal government is poised to do more on this issue, and that bipartisan agreement is possible across a range of housing policies. We’re turning to YOU—experts, non-experts, home owners, renters, and neighbors to crowdsource ideas for boosting housing supply.
Creative thinking to boost housing supply
We highlighted the main areas we’re interested in for this challenge but ultimately we’re relying on you to get creative. If you think a given overlooked policy lever could have an impact on housing supply we want to hear about it.
Here are some areas we are excited and motivated by, and there’s always more to discuss.
Construction Innovation
Construction innovation has gotten more attention in recent years. While such innovation only matters if you can build more housing in the first place, construction efficiencies will only grow in importance. Brian Potter of the Institute for Progress writes about the overlooked roles of modular housing, the rise and fall of the mail order home, and building components. Novel ideas on how best to alter restrictive building codes will also be important. The Center for Building in North America has been doing much original work on this subject.
The limited rise of Accessory Dwelling Units (ADUs) is promising, but it seems like more remains to be done to promote familiarity with the opportunity they provide. Are there ways to incentivize folks across urban areas to take advantage of ADUs?
Financing Innovation
Federal financing is another area where creative arrangements, properly designed and communicated, could massively help everyday people. The White House already sought to make Construction to Permanent loans more widely available. Efforts to reform the Low Income Housing Tax Credit (LIHTC) and improve the housing enterprises’ ‘Duty to Serve’ underserved mortgage markets are underway. What other financing needs can be met at the federal level?
Public Land Innovation
The scarcity of available land, especially in urban areas, seems like an insurmountable barrier. However, a closer accounting of public lands and facilities can reveal opportunities and assets that cities may not have realized they could take advantage of to do things like build housing or transit. The Putting Assets to Work initiative is helping cities better account for the value of their physical assets. How can we incentivize locales to assess and use their assets most efficiently?
Effective Measurement
What gets measured gets done. Ways to improve or introduce new federal data resources to measure the housing crisis are critical. There’s a wide range of datasets available from FHFA, Census Bureau, the Federal Reserve, HUD, and more agencies. Organizations like the National Low-Income Housing Center also provide key information . But are there key things like home loss rate that we’re not fully tracking?
Finally, what incentives to boost home supply are we not thinking about in any form right now? We are not looking for the federal government to get directly involved in local zoning issues; instead we want to hear about other productive paths you can help us identify to increase the national housing supply.
To submit an idea, head over to our challenge page.
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