The US Can Solve Its Housing Crisis. It Just Needs to Start Building

For all its complexities, America’s nationwide housing crisis boils down to a problem of supply and demand: The country needs a lot more homes than it has, yet even ambitious reforms won’t provide developers with enough incentive to bridge the gap. Addressing this dilemma could well be the defining public-policy challenge of the next few decades.

The problem is enormous: To close an accumulated shortfall estimated at 3.8 million units, the pace of housing construction would need to be about 50% higher over the next decade. Liberalized zoning and other regulatory reforms can certainly help improve this picture, especially if they spread to more places and types of housing, simplify building codes and speed up approvals. But they’re not sufficient to ensure adequate supply. Even in Los Angeles, where a new state law has engendered a boom in “granny flats” and other so-called accessory dwelling units, the effect on overall housing supply has been minimal.