A new report released by the National Association of Realtors and authored by the Rosen Consulting Group, has highlighted the extensive underbuilding in the U.S. and the effects of underinvesting in housing.
Following decades of underinvesting and underbuilding, the country faces a shortage of available housing. There is also a worsening affordability crisis and an aging housing stock that is in need of repairs. The scale at which the existing demand-supply gap is huge and will require a national commitment to build more housing of all types.
“The state of America’s housing stock… is dire, with a chronic shortage of affordable and available homes [needed to support] the nation’s population,” the report asserts. “A severe lack of new construction and prolonged underinvestment [have led] to an acute shortage of available housing… to the detriment of the health of the public and the economy. The scale of underbuilding and the existing demand-supply gap is enormous… and will require a major national commitment to build more housing of all types.”
The report suggests a few strategies that would support housing of all sizes across the income spectrum.
First, the article suggests addressing the large shortages in capital and lending for the development of affordable housing. The aim is to expand resources and maximize the potential of existing programs.
Secondly, the report proposes there be incentives for shifting local zoning and regulatory environments to significantly increase the quantity and density of developable residential space. Additionally, NAR furthered their recommendations for zoning and permitting policy reform earlier this year in a separate study. You can find that report here.
The report went on to suggest there be an increase in housing supply by promoting conversions of older or underutilized commercial space. Several communities around the country have redeveloped abandoned malls or shopping centers into mix-use space. Retail space surrounded by condos and public greenery.
Another item on the proposal: expand capacity for residential construction by applying federal resources to help address the challenges construction industries face such as the rising costs of doing construction and labor along with materials shortages.
Lastly, the report recommended addressing the national underbuilding gap by requiring a coordinated approach to planning, funding and developing all forms of infrastructure. The report suggests not only building more housing but to also build better housing that will be more inclusive and well-integrated into local communities. The mechanisms to achieve these goals, according to the report would be to include strengthening and expanding the existing Affirmatively Furthering Fair Housing (AFFH) framework, a comprehensive recognition of the need for authentic community engagement in all types of infrastructure.
You can read the full news release from NAR here.