What Is The Solution To The Housing Affordability Problem?

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April 19, 2016

Housing is become more unaffordable for a larger number of people across the country. This is especially true for households making less than $32,000 a year. With millions of Americans unable to afford even the most basic housing in the area where they live, it is apparent something needs to be done.

The simple solution would be to build more units. But the simplicity of this solution becomes clouded very quickly due to how expensive even modest housing has become to build. With restrictive zoning and myriad building codes, builders are often unable to build new housing units while also keeping the costs down.

Some argue this doesn’t matter, however. As the Bloomberg Review reports, even building more units that those making under $32,000 a year can’t afford will still help them in the long run. More housing means a lower demand and more people will be able to trade up from their starter apartments or homes to something new, thus increasing the supply of entry-level homes and apartments. With a decrease in demand and an increase in supply, the prices would drop to more affordable levels.

However, as Justin Fox writes, it isn’t likely this would be enough to help all of the households currently struggling to find affordable housing. As he suggests, the solution may seem to be a bit of a contradiction; at once, we need less government and more government. In other words, the government needs to change where its focus lies. Fox says the government should lessen zoning and housing regulations for builders while putting more focus on housing subsidies for the poor.

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