A Primer on Housing America

In two previous posts I outlined a brief history of affordable housing in the United States and the current mechanisms for creating more. Still, the gap between the affordable housing supply and demand increases. Is there any way to turn that around?

Part Three: Fresh Strategies for Providing Affordable Housing

There are approximately 141 million housing units in the United States. We added about ten million units over the past decade, which represents continued flattening over time (11 million new units 2000-2020; 14 million 1990-2000; 18 million from 1980-1990). Still, the net increase in the number of housing units outpaces the rate of change in our population (7.4 % increase 2010-2020; 9.7% increase 2000-2010; 13.1 % increase 1990-2000; 9.8% increase 1980-1990). Housing supply siders advocate that if we simply build more housing, prices will stabilize and affordability will increase. Yet, for forty years we’ve consistently added proportionately more housing units than our population increase, So, why do we have a persistent shortage of affordable housing?

Two powerful demographics contribute to the problem. First, family size in the United States continues to shrink. In 2020, the average family size was 2.53 people per household. In 1980, it was 2.76 people. This seemingly small difference (0.23 people per household) balloons to a demand for over ten million additional housing units. Regardless, simple division illustrates that 141 million dwelling units can accommodate 330 million people clustered in 2.53 family units. With ten million to spare. Yes, but…

Vacancy rates stubbornly hold at three to four million units at any time. Over five million units are second homes—vacant most of the time. And housing is simply not as portable as people and jobs and economic opportunity. For every growing city with expensive and scarce shelter, there are a dozen dwindling burgs where houses depreciate and languish, empty. Thus, demand exceeds the number of housing units in places people want to live. The whole situation is aggravated when available housing costs so much more than many can afford. As a result, too many people spend too much of their income on shelter.

Our mechanisms for creating more affordable housing are tepid; our collective will to make safe housing a basic right is feint. Supply side housing advocates suffer the same blinders as supply side economists: the rich simply consume too many ‘benes’ for anything much to trickle down. Forty years of creating more housing than our relative population increase has produced bigger and bigger houses occupied by smaller and smaller families. It hasn’t created more affordable housing.

Revised zoning laws: enabling accessory dwellings; reducing parking; requiring inclusion; are all promising strategies to promote more housing that could be affordable. But if we are serious about generating more affordable housing, we have to think more comprehensively, and more boldly. We have to acknowledge that our housing problems are intricately tied to our economic inequality, our unsustainable consumption; our dwindling sense of community. We need to be as bold as Ebenezer Howard and last century’s Utopian idealists. We need to create housing that will root thriving, sustainable communities.

Three simple ideas.

First, create housing target zones. Incentivize people to move to existing communities with solid housing but declining population: Western New York; Mississippi; Nebraska. The pandemic and the Internet have proven that geography is fluid. True, many people prefer to live in cities. But the right incentives can help revitalize once vibrant towns to be lively again.

Second, promote smaller and more efficient dwelling units through ‘graduated’ real estate taxes. Just like a graduated income tax, a family with a large house, or multiple houses, should pay a higher tax rate on their excessive real estate. Meanwhile, a family with a modest home should pay proportionately less tax, which will help make entry-level home ownership more affordable.

Third, reinvigorate the Utopian notion that creating housing is an opportunity to reflect higher ideals. ‘Affordable’ housing shouldn’t be architecturally stigmatized on the outside, but within, it should experiment with new ways to accommodate family and community. Non-profit and government supported housing should be more congregate in nature, incorporate a range of private and shared spaces, explore how we can all live better with less stuff and more interaction.

Housing in the United States is a direct reflection of our culture, it promotes autonomy, privacy, and consumption. But our culture is environmentally unsustainable, mentally isolating, and physically unhealthy. Let’s reconceive affordable housing. Not as an inferior reflection of what the private market already provides. But as an experiment in preferred ways to live, which the rest of the housing market can then follow.