Neighborhood action can change housing supply, experts say
DENVER, Co. – As the spotlight has been on the affordable housing supply crisis, experts say how we got here has been a decades-long journey.
“There just aren’t enough homes for anyone to buy them,” said Daryl Fairweather, chief economist at Redfin.
Both supply and demand are driving home prices soaring this year. The average price of homes is up 13.2%. It’s already a record, but in other parts of the country it’s worse. The average price of homes in Phoenix rose 23.5%, Salt Lake City and Denver by about 20%.
“We got into this mess, in part because over the last decade there were fewer homes built, but in any decade, going back to the 1960s and even before, we were falling behind. building entry-level homes. In the 1980s, about 40% of new homes were entry-level homes. And now it’s just a single digit drop, ”Fairweather said.
A few factors have contributed to the lack of entry-level housing, one being that construction came to a standstill during the Great Recession, which impacted supply, and now housing from entry-level are not built, because demand has increased the price of land.
“If a developer wants to buy a piece of land, he wants to put the most luxurious building there so that he can recoup the expenses related to the acquisition of that land,” she said.
Another factor is zoning laws. Many neighborhoods in cities across America, where land is expensive, are zoned for single-family homes. The power to change which is found at the hyper-local level, but which has proven to be a controversial issue.
“It’s very easy for a group of homeowners to come together, to get a multi-family zoning block. They can show town halls and have a vested interest in keeping their property’s value high. Even if it goes against the interests of the community and of maintaining affordable housing. So it’s a very difficult problem, ”said Fairweather.
Jonathan Cappelli is an affordable housing advocate in Colorado. He says 37% of all single-family homes in the state are rentals and are not owned by the families who live there.
“We see that this trend is only increasing,” he said.
Like Fairweather, he agrees that one solution would be to change zoning laws to add more apartments and condos than families looking to buy their first home can afford.
“Density is really about fairness right now,” Cappelli said. “If you’re against leaving room for low and moderate income people in your community, then you kind of take the ladder you climb up to where you are and throw it down for next year . “
He says the best solution is for policies to become more affordable and equitable and for communities to recognize and embrace this.
With homeownership tied to wealth creation, experts and advocates say that while it was not our decision to end up in a low housing supply, it is up to the local government and citizens of help remedy it.