We all know the solution to the shortage: just build more housing. A wealth of research documents that places that expand their affordable housing supply see significantly slower rent growth than places that restrict construction.
We see this bear out time and again. San Diego took commonsense steps to streamline permitting and allow more density, which nearly doubled housing permits over two years, and now rents are falling in the city. Minneapolis allowed more small apartment buildings, and as new housing came online rent growth slowed sharply compared with similar cities and surrounding areas.
So why aren’t we doing this everywhere?
It boils down to politics. If we’re serious about lowering housing costs, we need to acknowledge and design around the political realities that stand in the way of meaningful action. Local politicians resistant to new housing aren’t hostile to affordability; often, they’re simply responding to the political incentives in front of them. Lowering costs means shaking up who has power at the local level and building units faster so that time-limited politicians can take credit for progress. Our policies should reflect these political realities, not wave them away.
Zoning, land-use rules and permitting processes are primarily controlled by city councils, planning commissions and neighborhood boards. Participation in these forums is dominated by a relatively small group of incumbent homeowners, most of whom are opposed to seeing new development in their communities. Renters make up more than a third of American households and would benefit most from more housing supply, but they are largely absent here. The result? A system that consistently overrepresents the people with the strongest desire to block change.
Then there’s the problem of time. It’s what some economists call the “affordability conundrum”: Housing takes years to plan, permit, finance and build, but families desperately need relief now. Facing near-term elections and pressure from constituents, policymakers at the federal, state and local levels often prioritize solutions promising quick results, even when those solutions do little to address the underlying problem or steer attention to areas where progress is faster and more visible. After all, who wants to watch their successor cut ribbons?
I recently helped design a plan to change who holds the power in local housing decision-making. Under this model, if a city meets a certain housing production target, its renters would receive “rent relief payments” to provide assistance right away. The impact could be seismic: Renters would be more likely to engage in zoning hearings and planning votes, because now those local decisions directly affect their wallets. Elected officials, in turn, would hear from a broader, more representative group of constituents. Over time, this rebalances local politics in favor of building.
The second part of the plan revolves around speed. Policy ought to deliver at “the speed of elections.” That means we also should rethink how we build housing. While nearly every other sector has figured out how to move faster and more efficiently, construction productivity has been stagnant for decades. We still build homes essentially the same way we always have: on-site, piece by piece. We need to jump-start housing construction innovation to deliver more housing, faster.
Our plan argues for launching something called ARPA-Home, modeled after the federal agencies that helped bring us breakthroughs like the Internet and clean energy technologies. ARPA-Home would allow government to make big bets on new ways to build and then quickly scale what works. By expanding factory-built housing that meets high standards, for example, this approach could get new homes built much faster — shortening the lag before people feel the impact and elected leaders can take credit.
The good news is that solutions to America’s housing shortage are staring us in the face. The bad news is the politics of housing policy often impede progress. But by designing policies that explicitly confront these constraints, we can finally start building our way out of this and bringing relief to the millions of Americans who need it.
Chad Maisel is a senior fellow for economic policy at the Center for American Progress.
Governing's opinion columns reflect the views of their authors and not necessarily those of Governing's editors or management.
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