I Have A Solution to Our Housing Affordability Problems, and It's to Make More Housing

 

There is hardly anything more basic than the concept of home, the reality of one’s own home, and the notion that everyone deserves a home. Accordingly, we devote a lot of personal attention and resources to saving up for, looking for, closing on, and then living in our home. And, rightly, we devote a lot of civic attention and resources to advocating for accessible and affordable housing for all. 

Given all that, let me try to say a few things about the topic of housing. I acknowledge that my opinions are just that: opinions. I hope they are opinions that are informed by the head and that come from the heart, even if they come from a particular life perspective and political ideology that not everyone around me agrees with. 

Like most goods and services, housing is generally governed by the influences of supply and demand. To take you back to freshman Econ 101, consumers tend to want to consume more of something if it’s cheaper (that’s the demand curve), while producers tend to want to produce more of something it’s more expensive (that’s the supply curve). You can see how these influences would apply to housing, just as it would with hamburgers and haircuts: if housing is cheaper you are motivated to buy more of it (e.g. a bigger house, a nicer kitchen), and if housing is more expensive you are motivated to sell more it (because you’ll make more money). 

So far I hope I haven’t said anything controversial. But I share this to show that there are some things we can do in the name of housing affordability that don’t really help but actually hurt. And, there are some things we don’t want to do that actually will help. 

To over-generalize, in America we tend to have two sides on any political debate. On this particular topic, both sides have sometimes expressed a similar sentiment but applied to different groups. One side says illegal immigrants are the reason for our housing affordability; take away their demand by blocking them from buying houses, and voila the rest of us will be able to buy houses for cheaper. Another side says the reason houses are unaffordable is we let Blackrock and other big institutional investors buy everything up, bidding up prices and making the remaining units inaccessible to the rest of us.

But there’s another participant in this discussion, which is those that are selling those houses. Leaving aside how hard it would be to exclude an entire group from buying a house, such a restriction has the effect of preventing a house-seller from selling their house at the highest price someone has agreed to pay for it. And, since all of us house-buyers eventually become house-sellers (unless you want to die with the house and pass it on to your kids, I guess), anything that makes it harder to sell a house makes it a little less attractive to buy a house. 

So restrictions on who can buy, aside from being distasteful about picking who’s worthy and who isn’t, seem far less attractive than something that can actually address the housing affordability issue, which is making it easier for new housing to be built. That is truly Econ 101: when demand goes up for a product, there are two things that happen, one being that supply goes up to meet the demand (and price stays the same), or supply is fixed and as a result price goes up (which is literally the opposite of affordability!). 

“Making it easier for new housing to be built” can take many forms, from clearing the way for developers to do big projects to providing incentives for existing houses to be renovated up to modern preferences to even allowing people to rent out portions of their property (a room, an accessory dwelling unit in the backyard). 

Now obviously, when matching supply and demand, not all units are the same. A renovated studio unit in Fargo is not the same thing as a brand new single-family detached place in the Silicon Valley, and so forth. But, generally speaking, the very places where affordability is a challenge are the places where demand is high and supply is unnecessarily fixed. I say “unnecessarily” because it’s usually not a situation where you literally can’t cram any more housing into an area, but rather it’s made-up reasons like “I don’t want ‘those people’ in my neighborhood,” or if you’re trying to masquerade as a better person than that you say things like “it’ll wreck the built character of the block” or “it’s out of scale” or “it’ll ruin my view” or blatantly erroneous things like “it’ll be bad for the environment.” I find it bigoted to hate certain groups and then justify your ineffective housing solutions by furthering piling on them. I also find it hypocritical to say that you are an ally to certain groups and then oppose effective housing solutions that will help those groups. Politics in 2025, ladies and gentlemen!

In sum, there are ways people have devised to solve the housing affordability problem that are merely outgrowths of their politically motivated disdain for certain groups, whether it is racial groups or rich companies. And then there is the far more straightforward solution, which is to let there be more units available. This is truly a real discussion with real consequence. There’s nothing more basic than making sure we all can live somewhere without breaking the bank. Let’s stop posturing and let’s start solving the problem.