Novel Solutions to the Affordable Housing Crisis

American families seek homes that fit within their budgets and are located near jobs, schools, family, and opportunity. Yet for many, the American dream of homeownership is slipping away.

The U.S. faces a housing shortage estimated at 4 to 7 million homes, driven by a convergence of factors: high mortgage interest rates; restrictive regulatory environments; rising construction costs fueled by inflation and tariffs; loss of immigrant labor; low existing-home inventory; and changes to household formations. In 2023 alone, 1.8 million new families were formed, while only 1.4 million homes were added to the nation’s housing stock.

The consequences are stark: escalating rents, soaring home prices, increased homelessness and displacement, and families delaying moves or downsizing to avoid losing historically low mortgage rates available in the early years of this decade.

Adult children are moving back in with parents, and households are “doubling up” with non-relatives. Communities also suffer economically, as a lack of housing makes it difficult for municipalities to attract and retain workers amid an aging population and shrinking workforce.

Municipalities need rooftops to sustain local economies. A diverse housing stock provides options for households at different life stages, incomes, and sizes, yet such diversity is lacking across much of the country.

While many solutions have been proposed, four strategies stand out for their ability to speed approvals and get homes built.

1. Build Smaller and on Infill Lots

According to a report from CBRA Investment Management released in August 2025, the U.S. faces an acute shortage of smaller homes, highlighting a mismatch between buyer demand and new development.

Smaller-footprint single-family homes on narrower lots can serve first-time buyers and downsizers at lower price points. Increased density, such as homes on 30-foot lots instead of half-acre parcels, allow communities to accommodate more residents without fundamentally changing neighborhood character.

Smaller homes appeal to a wide range of buyers, including single professionals, young couples, families with fewer children, and those wishing to age in place. Infill development also tends to face less opposition, particularly when it replaces vacant or underutilized parcels.

In many cases, redevelopment improves existing conditions, and public incentives may offset demolition or remediation costs. Infill sites near urban cores often benefit from transit access, reducing parking needs. Importantly, younger buyers increasingly prioritize location and lifestyle over square footage.

2. Consider Modular Housing

Modular and other forms of offsite-built housing offers a compelling path forward. Homes are manufactured in American factories and assembled onsite, dramatically improving efficiency.

This process can reduce construction time and costs, bringing homes to market faster and at more attainable prices. When paired with buyer incentives, modular construction can accelerate neighborhood development and expand access to homeownership, including in communities historically excluded from generational wealth-building.

Modular homes are typically smaller and well-suited to households earning median or below-median incomes, making them an essential tool for closing the supply gap.

3. Be a Good Neighbor 

Meaningful housing reform is often stalled by those who already own homes and wield outsized influence in local politics. Concerns about traffic, congestion, and construction impacts, common proxies for NIMBYism, can derail new housing projects.

Developers seeking to streamline approvals should engage communities early. Soliciting feedback, addressing concerns where feasible, and offering benefits beyond required impact fees can reduce opposition and delays.

Adding a pocket park, bike path, or preserving a historic façade may increase upfront costs, but these investments can shorten entitlement timelines and reduce carrying costs.

By clearly demonstrating “what’s in it for them,” developers can build trust and minimize resistance from neighbors and policymakers.

4. Revise Zoning Ordinances 

Municipalities can protect what matters most while encouraging new housing. Forward-thinking zoning codes may allow accessory dwelling units (ADUs), such as basement apartments or above-garage units, to increase supply without dramatic aesthetic change.

Communities that value historic preservation can incentivize retention of significant features while allowing reconstruction elsewhere. Where multifamily buildings border single-family neighborhoods, thoughtful setbacks, landscaping, or community contributions can mitigate impacts.

The housing crisis can no longer be ignored. By embracing smaller homes, modular construction, community partnership, and modernized zoning, developers and municipalities can work together to deliver housing more quickly, efficiently, and equitably, bringing the American dream back within reach.