Rising affordability challenges in the housing sector continue to highlight the severity of a mounting supply deficit, one which is exasperated by a steep uptick in household formation. While the nation’s housing stock grew by roughly 6.3 million housing units from 2015 to 2021, the total number of families living in the United States increased by 7.9 million, and 7.1 million new households were formed during that same period, according to Zillow.
To meet current demand for housing, the U.S. needs to build back from a deficit of 4.3 million housing units, but as costs for building materials rise and labor remains in short supply, resolving that shortage is going to require additional funding and major policy reform.
Some steps in the right direction include zoning reforms to allow for more housing units as opposed to just single family detached homes. This alone would create millions of critically needed new housing units and surveys show most residents would support such changes in their own neighborhoods to increase supply. More steps, such as eliminating or reducing parking requirements, minimizing building permit approval delays, establishing and expanding affordable housing trust funds should also be explored. Ultimately, developers need to be at the forefront of new home construction in order to meet the demand that exists in every part of the housing market.
Advertisement
Related Stories
Affordability
How Much Must American Renters Earn to Afford Average Rental Prices?
US rents have increased 3.6% year-over-year, pushing the amount renters must earn to afford average rents to around $80K
Market Data + Trends
Survey Shows Confidence Drop in Multifamily Development in Q1 2024
Current sentiment has NAHB projecting that multifamily starts will decrease by 28% during 2024 as developer activity slows
Planning + Development
Developers Target Hotels for Adaptive Reuse Projects in Major US Cities
Of the growing number of adaptive reuse projects in 2023, hotel conversions stole the show, surpassing office-to-apartment conversions