Who Is Responsible for the U.S. Housing Crisis?
Jerusalem Demsas, staff writer at The Atlantic, calls the American housing market a "national tragedy." I’m a big fan of Demsas who’s kept her eye on the American housing world before it was popular to write about. In this CNN interview she lays out some of the reasons we have a housing shortage. There’s so much to unpack from her interview - watch it!
CNN: One would think that builders would rush to build more houses so they can sell it to consumers who want them right? What are the stumbling blocks?
Demsas: Developers are chomping at the bit to build whether it's private market developers but also I talk to affordable housing developers who are really really wanting to build. They see this demand, they want to be able to do this and often they have the money to be able to do this but the laws make it very difficult to do so. To give you an example, you know starter homes are often thought to be around, 1500 square feet you know that's the size of a starter home that baby boomers were used to buying for their first house. Now, that kind of house is illegal to build in the vast majority of residential land in this country. You cannot just go as a builder and buy some property and decide you're going to build a bunch of small starter homes, it's illegal. In many places you'll have to build something that's at least 5,000 square feet maybe even 10,000 square ft. In some parts of this country houses are not allowed to be built on smaller than one acre of land. When you create those kinds of regulations at the local level that make it impossible to build smaller houses, you're basically outlawing affordable housing that can be bought by people who are making a middle- income salary even if they're working two jobs and that's why we see you know home prices going from an average of you know $300,000.
“When you create those kinds of regulations at the local level that make it impossible to build smaller houses, you’re basically outlawing affordable housing”
