There’s a massive housing shortage across the US. Here’s how bad it is where you live
Danielle and Colin Lloyd spent the past year trying to buy a house in Atlanta, which went about as you’d expect these days.
“There is just nothing in this whole area, just nothing,” says Danielle. The couple was looking for a place with at least a small yard and space for their three young kids.
“The prices were just ridiculous,” says Colin. “People were just bidding much higher than what the house was listed for.”
“I only cried twice,” Danielle chimes in.
Meanwhile, their landlord was about to raise their rent by $450 a month, which also was caused by the same problem — not enough homes to rent or buy.
“We’re seeing a shortage, or housing underproduction, in all corners of the U.S.,” says Mike Kingsella, the CEO of Up for Growth, which on Thursday released a study about the problem. The nonprofit research group is made up of affordable housing and industry groups.
“America’s fallen 3.8 million homes short of meeting housing needs,” he says. “And that’s both rental housing and ownership.”
Home prices are up more than 30% over the past couple of years, making homeownership unaffordable for millions of Americans. Rents are rising sharply too. The biggest culprit is this historic housing shortage. Strong demand and low supply mean higher prices.
Part of the problem goes back to the last housing crash, which happened around 2008. After that, many homebuilders went out of business, and economists say we didn’t build enough for a decade.
So Up for Growth’s study took a look at what’s happening in 800 cities and towns.
“In Los Angeles, for instance, which is the most underproduced metro in the country, it’s lacking 8.4% — nearly 400,000 homes missing across the region,” Kingsella says. In other words, given the population of Los Angeles, there should be that many more units to meet the demand.
It’s not just LA. In hundreds of big cities and small towns, from Boston to Boise, there’s a housing shortage. But Kingsella says this is a solvable problem: “It doesn’t have to be this way, is a key message coming out of this report.”
Perhaps the biggest issue, he says, is that states and towns desperately need to change their zoning rules.
Changing outdated zoning rules is key
In Atlanta, Ernest Brown heads up the local chapter of housing advocacy organization YIMBY Action.
“The YIMBY movement, which stands for ‘yes in my backyard,’ is kind of poking fun at the idea of NIMBY, ‘not in my backyard,'” he says, referring to the long-standing issue of existing homeowners objecting to efforts to bring more affordable housing to their neighborhoods. Often they worry about greater density changing the character of the neighborhood or causing traffic and parking problems.
Brown says many places like Atlanta have outdated zoning rules that allow for either big apartment buildings downtown or single family homes on big lots — and nothing in between. He says that this results in a “missing middle” of more affordable town houses or smaller starter homes closer together.
Brown hears people complaining all the time about not being able to afford a house. He tries to get them to go to zoning meetings and call their representatives.
“They actually want to hear from you, particularly at the local level,” he says. Brown says what he likes about the housing issue is that if you get involved, you’re not just yelling into the wind about far-off federal politicians in Washington. Big changes have to happen at the state and local levels, he says.
“I have the phone number and regularly chat with my council person.”
On this economists agree: We need more housing
There is some debate about just how bad the shortage is in terms of the number of homes the U.S. needs. Mark Zandi, the chief economist of Moody’s Analytics, estimates the shortfall is closer to 1.6 million homes. He was not a part of this study.
“It’s very difficult to know precisely what the shortage is,” Zandi says. “But the bottom line is, no matter what the estimate is, it’s a lot of homes that we’re undersupplied.” And he adds there’s no doubt that many more homes need to be built to ensure that housing becomes more affordable, whether it’s rental housing or homeownership.
You don’t have to convince Andrea Iaroc of that. She works for nonprofit art museums and lived in Seattle for many years, where buying a house has long been very expensive. “It was just too much for me,” she says.
In 2019, she moved to Los Angeles: “I thought, ‘OK, let me see what it looks like over here.'” But she still couldn’t afford to buy a home. Iaroc has family in Colombia. So now she’s seriously considering moving there and trying to work remotely, consulting for museums in the United States.
“I have some of my friends who are digital nomads, and they’ve done that,” she says. “That used to be maybe Plan B. Now it’s become Plan A.”
Some cities and states are making changes
“I see firsthand the building political will mounting to take on and tackle this challenge,” says Up for Growth’s Kingsella. He points to California, Oregon and Maine, which all recently passed laws to end single family zoning by allowing for the construction of more than one home per parcel of land — for example, an in-law apartment over a garage or a backyard cottage. Kingsella expects more states to take similar actions in coming years as one way to help boost the supply of rental units.
Drive until you qualify
In other parts of the country, though, including Atlanta, such zoning reforms are still being voted down.
Danielle and Colin Lloyd did what many Americans have done over the years: look much farther away to find a place they can afford to buy. It’s often called “drive until you qualify.” And they just bought a house in Walnut Grove, Georgia.
“I told somebody at church, and she was like, ‘Oh, my goodness, you all moved to Egypt — you’re so far out!'” says Danielle.
It’s about an hour from where they used to live and work in Atlanta. They can both mostly work remotely, so they’re not too worried about the commute.
They just moved in a couple of weeks ago. And they are feeling a little apprehensive about being an African American family moving from the city into a tiny rural town that is nearly 90% white, according to census data. There’s a bit of a culture clash, too.
“Moving to country Georgia where there’s an ammo shop down the street, it’s like a constant in your face,” Danielle says.
But the couple says the neighbors seem friendly. There are other families with kids. So they’re feeling hopeful.
“I love the idea of like when the kids are a little older saying, ‘Yeah, go play at your friend’s house.'” Danielle imagines what it will be like watching them run over to the neighbor’s place: “I can see them, like, at the corner, you know. ‘I’ll watch you ride over there,'” she says. “I love that.”
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