Housing Crisis Deepens: Why Local Rules Hamper Building

America’s Housing Shortage Reaches Crisis Point

A critical shortage of housing across the United States is preventing a generation from achieving basic milestones like moving out of their parents’ homes or buying their first property. This issue, which has been building for years, has now spread from major coastal cities to nearly every corner of the country. The problem is so widespread that even historically affordable areas are struggling to keep up with demand, impacting essential workers and young families.

Jenny Schutz, vice president of infrastructure and housing at Arnold Ventures and author of “Fixer Upper, How to Repair America’s Broken Housing Systems,” explained the core of the problem. “The U.S. hasn’t built enough homes to keep up with demand for about 15 years going back to the Great Recession,” she stated. This lack of new construction means there simply aren’t enough places for people to live, especially in areas experiencing job and population growth.

From Coast to Coast: A Nationwide Problem

What was once a challenge primarily faced by cities like New York and San Francisco has now become a national concern. Places that used to be affordable and built plenty of homes, such as Austin, Nashville, and Denver, are now experiencing significant price increases and struggling to house newcomers. This trend is also visible in Mountain West states like Montana, Idaho, and Wyoming, where demand has surged, making it difficult to provide housing for essential workers.

Schutz highlighted the real-world impact of this shortage. “This is about 24-year-olds not being able to move out of their parents’ house and live independently, people not being able to buy their first home, essential workers not being able to live in the communities where they work,” she said. This situation creates economic and social barriers for many Americans.

The Myth of Living Farther Out

A common suggestion is that people can simply live farther from city centers where housing is cheaper. However, Schutz pointed out that this solution relies on other infrastructure that is often lacking. “Being able to live farther out depends on a lot of other things that we also don’t do,” she noted, specifically mentioning the need for robust public transit.

Without good public transportation, commuting from distant suburbs becomes impractical. This leads to increased car usage, traffic congestion, and environmental problems. “When we build most of our housing far away from jobs, from services, from shops, then we get more traffic congestion problems,” Schutz explained. Furthermore, desirable communities with good schools and parks often restrict the types of housing available, making it difficult for renters or those who don’t want a large single-family home to live there.

Local Solutions, Big Impact

While presidential candidates may promise sweeping federal solutions, the real power to change housing availability lies with state and local governments. Schutz emphasized that effective solutions require changes to local zoning laws and development processes.

Zoning Reforms Needed

A significant barrier is restrictive zoning, with over three-quarters of land in the U.S. set aside exclusively for single-family homes. This limits the types of housing that can be built. “Allowing things like accessory dwelling units and backyards, duplexes, townhouses, apartment buildings close to transit and jobs,” Schutz suggested, would diversify housing options and make communities more accessible.

Streamlining Development Processes

Beyond zoning, the process of getting new housing approved can be overly complicated and time-consuming. Many communities require multiple reviews, such as environmental impact assessments, design reviews, and historic preservation checks. While these processes often start with good intentions, they can add significant costs and delays.

Balancing Local Character with Housing Needs

Addressing the complexity of local regulations requires careful consideration. Residents often want to preserve the character of their neighborhoods, which can conflict with the need for more housing. “How do you manage that?” Schutz asked, referring to the challenge of having enough rules without creating excessive barriers.

Montana’s recent land use plan offers a potential model. It requires larger cities to plan for future housing needs based on projected population and job growth over the next five years. These updated plans allow development that conforms to the new rules, while still involving the community in the planning process. Crucially, this approach prevents individual complaints from blocking every new housing project, such as accessory dwelling units or duplexes. “The community doesn’t get to show up on Tuesday night and complain about every apartment building and every accessory dwelling unit that a homeowner wants to build in their backyard,” Schutz clarified.

Looking Ahead: The Path to More Housing

The housing crisis is a complex challenge with deep roots, but the path forward involves empowering local governments to enact sensible zoning reforms and streamline development processes. By allowing for a greater variety of housing types and simplifying approval procedures, communities can begin to address the shortage and create more affordable options for everyone. Future attention will likely focus on how other states and cities adopt similar forward-thinking land use strategies to overcome local hurdles and build more housing.

Source: A housing crisis for an entire generation (YouTube)