How the next president can solve America’s housing crisis
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And for good reason. U.S. housing costs are out of control. The median home for sale was rarely more than four times the median household income throughout the 1980s and 1990s. But by 2022, it had risen to nearly six times. Renters have not fared better. In 1980, around one third of renters were cost burdened, meaning they spent 30 percent or more of their income on housing. Fully half of renters are cost burdened today.
The main reason housing is too expensive is that we don’t build nearly enough of it. The most recent estimates from Freddie Mac place the national shortfall at a staggering 3.8 million housing units. This gaping hole in the country’s housing supply negatively impacts nearly every aspect of American life, reducing economic growth and hindering workers and families from achieving the lives they desire.
How did we get here? After all, buyers want to buy and builders want to build. The answer is found in a labyrinth of local zoning rules, building codes, and land use regulations that shape the map of what gets built and where. Thanks to the proliferation of local red tape, it is now impossible for the market to deliver the housing supply Americans need at prices that are broadly affordable. In other words, the U.S. housing market barely functions as a market at all.
