Does the United States have lots of housing units or a shortage? The two sides of the argument:
- A few years ago, I had a conversation with a sociologist who studies housing. When I brought up the issue of not enough housing units in connection with a need for more affordable housing, they said the problem was not a lack of units. Rather, more of those units needed to be made available to the people who for a variety of reasons could not easily access them now.
- A recent opinion piece states the other side of the argument:
“Stephen, you’ve been proven right on housing, and I think you’re about to be proven even more right. The most important driver of home prices is supply and demand. And right now, there is a chronic undersupply of homes in America.“
As I said, the 2008 bust turned a lot of folks off from investing in housing. It shattered the confidence of homebuilders, too. Census Bureau data shows an average of 1.5 million homes were built each year since 1959. Yet since 2009, just 900,000 homes have been built per year. In fact, fewer homes were built in the past decade than in any decade since the ‘50s!
We have a serious housing shortage in America today. It would take less than six months to sell every existing home on the market, as you can see here…
…In the past year or two, the first wave of young homebuyers came into the market. But every year for the next decade, tens of millions of Millennials will hit home-buying age.”
I could see a possibility where both prognosticators could be true: there are many dilapidated or older units that need to be updated and priced in ways that more people can access them and there is a relatively shortage of new homes that meet the demands and tastes of younger buyers.
But, this gets at some bigger questions about housing in the United States:
- How many older housing units can be renovated to today’s codes and standards? And who should pay for this?
- Should anyone be put in charge of or help set housing prices so that more housing units are within economic reach of more residents?
- Should developers and builders primarily focus on profit or do they also have a responsibility to communities (beyond paying a fee for affordable housing or sprinkling in a few cheaper units)?
- Can housing be revitalized in areas without significantly changing the population composition or housing values or other ways that might significantly disrupt what current residents like about the location?