Economy
The US Housing Crisis: Why There Aren't Enough Homes
The US has a housing crisis because it is not building enough housing. That is the complete explanation. Everything else — investors, AirBnB, speculation, immigration — is secondary to a supply shortage that has been building for 40 years.
The numbers: the US is short approximately 4 million housing units. (Freddie Mac, Housing Supply Report) In major metropolitan areas — where most jobs are — the gap is most acute. San Francisco, New York, Los Angeles, Boston, and Seattle have added millions of jobs over the past 20 years and built almost nothing to house the people doing those jobs.
Why? Zoning. Roughly 75% of residential land in major American cities is legally restricted to single-family homes. You cannot build an apartment building there. You cannot build a duplex. You cannot build a townhome. The only legal development is one house on one lot. In a city of 10 million, that math does not work. (Brookings Institution, Zoning and Housing Costs)
This was not always the case. The density of pre-war American cities — the brownstones, the triple-deckers, the corner shops above apartments — was built under looser rules. Post-World War II suburban expansion brought single-family zoning that protected the investment of early homeowners by preventing density that might lower property values.
It worked for them. It destroyed affordability for everyone who came later.
The politics are cruel in their clarity. Existing homeowners benefit when housing prices rise. They vote at high rates. Local politicians serve them. New construction — which would add supply and moderate prices — is consistently blocked by the people who already own, at the expense of the people who do not.
The federal government has limited power over local zoning. The Biden administration tried incentive-based approaches — requiring local housing construction as a condition for certain federal grants. The Trump administration has dropped those incentives.
The housing crisis will not be solved by who owns the White House. It will be solved when enough states override local zoning with state-level zoning reform — which Oregon, California, and a handful of others have started doing. That is where the real action is happening.