Housing Affordability

Summary

We support:

• Reforming zoning and permitting rules that unnecessarily restrict housing construction
• Allowing greater density near jobs, transit, universities, commercial centers, and existing infrastructure
• Reducing regulatory barriers that increase construction costs without clear public benefit
• Favoring broad income support over housing-specific subsidies
• Opposing rent control
• Preserving local input while limiting the ability of small groups to block needed housing
• Encouraging infrastructure investment where additional housing growth is expected
• Addressing homelessness with a combination of lower-cost housing options, targeted support, treatment where needed, and public-order enforcement where necessary

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If you have already made up your mind, then scroll to the bottom of the page and take the poll to let us know how you feel. If you need to hear more, please read the background section below.

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Background

Housing affordability is often discussed as if it were a single problem with a single cause. It is not.

It is useful to distinguish between the cost of building housing and the market price of buying or renting housing in a particular place.

Over time, housing quality has improved substantially. Modern homes often include better heating and cooling systems, more efficient appliances, improved insulation, better windows, more bathrooms, larger kitchens, safer wiring, and other improvements that raise measured costs but also provide real value. A square foot of new housing today is not the same product as a square foot of housing built decades ago.

This chart is intended to illustrate the broad relationship between construction costs and market housing prices over time. It is heuristic rather than a precise statistical series.

For much of the modern period, the real quality-adjusted cost of constructing housing appears to have been far less explosive than the market price of housing in many high-demand communities. That difference matters. The problem in many places is not simply that houses have become vastly more expensive to build. It is that land, regulation, permitting delays, local opposition, infrastructure constraints, and rising demand have made housing scarce where demand is strongest.

In a strict economic sense, there is not usually a housing “shortage” in the way there was a shortage of toilet paper during peak COVID. Housing is generally available to those able and willing to pay the market price. The problem is affordability in the ordinary political sense: many households cannot obtain the kind of housing they want, in the location they prefer, at a price close to what they expected to pay or were used to paying.

The recent run-up in housing prices had an additional cause. COVID and the shift toward working from home increased demand for more living space, including room for home offices. That change occurred quickly. Housing supply cannot respond quickly. It takes time to permit, finance, and build new homes, and in many communities supply is further constrained by zoning and land-use rules. One study by John Mondragon and Johannes Wieland found that the shift to remote work explains more than half of the increase in U.S. real house prices from 2019 to 2023, while related San Francisco Fed analysis found similar effects on rents.

That does not mean remote work is the only cause of high housing costs. It is not. Nor does it mean every community faces the same problem. But it does help explain why prices rose so sharply in recent years, especially in places where households suddenly wanted more space or could move farther from traditional employment centers.

The policy lesson is straightforward: housing subsidies cannot make housing less expensive. If government increases buyers’ or renters’ ability to pay while supply remains constrained, much of the benefit is likely to be captured in higher rents or higher home prices. Assistance to households is often better provided through broad income support rather than subsidies tied to a specific good or service. A serious housing policy must address supply, regulation, infrastructure, and targeted assistance together.

Housing Supply and Zoning Reform

We support reforms that allow more housing to be built by removing unnecessary barriers to construction, especially in areas where demand is strong.

Many zoning rules were adopted for understandable reasons: reducing congestion, protecting neighborhood character, separating incompatible land uses, or preserving open space. But over time, some of these rules have become excessive. Minimum lot sizes, limits on multifamily housing, parking requirements, lengthy permitting processes, and discretionary review can sharply restrict supply and raise costs.

These restrictions often benefit current homeowners by limiting competition and supporting property values. But they also impose costs on renters, young families, workers, and future residents who are priced out of communities where they might otherwise choose to live.

We do not believe every neighborhood should be treated the same. A quiet residential street is different from a transit corridor or a commercial district. But communities should not be able to use zoning rules simply to prevent any meaningful housing growth.

A politically realistic approach should focus first on areas where additional housing makes the most sense: near transit, job centers, universities, commercial corridors, and existing infrastructure.

Local Control and Its Limits

Local input is important. Residents have legitimate concerns about traffic, schools, parking, infrastructure, public safety, and the character of their neighborhoods.

But local opposition to new housing is not always legitimate. Restrictions on multifamily housing, minimum lot sizes, and other land-use rules have sometimes been used to exclude lower-income households and, directly or indirectly, racial minorities. Even when race is not mentioned, opposition to higher-density or lower-cost housing can have exclusionary effects.

Local control should not become a blanket veto over housing that is demanded by the broader community.

Housing markets are regional. A city or neighborhood that blocks housing does not eliminate demand; it pushes people farther away, increases commuting burdens, raises prices elsewhere, and often shifts costs onto neighboring communities.

For that reason, state governments may have a legitimate role in setting minimum standards for housing production and limiting the most restrictive local rules. This should be done carefully, with attention to infrastructure and local conditions, but the principle is sound: local preferences matter, but they are not the only interests at stake.

Income Support Is Better Than Housing Subsidies

We generally prefer broad income supports, such as the earned income tax credit, the child tax credit, or a guaranteed basic income, over targeted subsidies for specific goods and services.

Targeted subsidies may be appropriate when the good or service produces large public benefits that individuals are unlikely to fully consider on their own. Public support for education is a good example. Housing is different. Shelter is essential, but subsidizing housing directly can increase demand for housing in specific locations without increasing supply. When supply is constrained, much of the subsidy may be captured through higher rents or higher home prices.

That does not mean government should ignore people who are struggling. It means assistance should generally be provided in a way that gives households flexibility rather than pushing more money into an already supply-constrained housing market.

Broad affordability requires reducing unnecessary regulatory costs, allowing more housing to be built where demand is strongest, and addressing infrastructure constraints that limit supply.

Rent Control

We oppose rent control.

Rent control may protect some existing tenants in the short run, but it does so by forcing landlords to provide housing at below-market prices. That is a form of subsidy, but one imposed on a particular group of property owners rather than funded transparently through the tax system.

The larger problem is incentives. Rent control reduces the return to building, maintaining, and renting housing. Over time, it can discourage new construction, reduce the quality of existing rental housing, encourage conversion of rental units to other uses, and make it harder for new renters to find housing.

Rent control also tends to benefit those who obtain controlled units, not necessarily those with the greatest financial hardship. A tenant in a rent-controlled apartment may receive a large benefit because of timing rather than need.

The concerns that lead people to support rent control are often real: sudden displacement, abusive landlord behavior, unsafe housing, and the difficulty some households face adjusting to rapidly rising rents. But rent control is the wrong tool. Those problems are better addressed through broader income support, targeted temporary assistance, stronger enforcement of housing safety standards, and protections against fraud, retaliation, and unlawful eviction.

Property Rights and Neighborhood Stability

Housing reform should respect property rights, including the rights of homeowners and small landlords.

Property owners should generally have greater freedom to add accessory dwelling units, convert unused space, build duplexes or small multifamily housing where appropriate, and make productive use of their land.

At the same time, reform should be implemented with reasonable attention to neighborhood stability. Sudden, poorly planned changes can create backlash and undermine support for broader reform. Better policy would allow gradual increases in density, especially in places where infrastructure can support it.

The goal should not be to abolish neighborhoods. The goal should be to make room for more people to live in them.

Homelessness and Supportive Housing

Homelessness is related to housing affordability, but it is not only a housing-supply problem.

Some people become homeless because housing becomes too expensive relative to changed financial circumstances, such as job loss, divorce, medical emergencies, family breakdown, or loss of a roommate. Others face mental illness, substance abuse, criminal records, or other barriers that make stable housing difficult.

We support reducing barriers to lower-cost housing, but we also believe homelessness policy must distinguish between different causes. Some people need temporary financial assistance. Some need supportive housing with services. Some need treatment. Some need stronger public-order enforcement when behavior threatens public safety or the ability of others to use public spaces.

Compassion and accountability are not opposites. A serious homelessness policy should include both.

Infrastructure and Growth

Housing growth requires infrastructure.

Communities asked to accept more housing should also receive support for roads, transit, schools, water systems, parks, and public safety where growth creates new demands. Ignoring these costs makes housing reform harder to sustain politically.

At the same time, infrastructure concerns should not be used as an all-purpose excuse to block housing indefinitely. If infrastructure is inadequate, governments should identify what is needed, how much it will cost, and how it will be funded.

A politically realistic housing policy should pair zoning reform with infrastructure planning.

Conclusion

Housing affordability cannot be solved by slogans.

Restrictive zoning, excessive permitting, and local opposition to new housing have contributed to high housing costs in many parts of the country. The recent shift toward working from home added pressure by increasing demand for more space faster than housing supply could respond. At the same time, residents have legitimate concerns about infrastructure, neighborhood stability, and quality of life.

A serious housing policy must balance these concerns.

We support reforming unnecessary regulatory barriers, allowing greater density where it makes sense, respecting property rights, opposing rent control, and favoring broad income support over housing-specific subsidies.

Housing policy should expand opportunity, respect property rights, address real local concerns, and recognize the basic economic reality that when housing supply is constrained, housing becomes more expensive.

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