ZaneFischer-ExtraordinaryStructures

America’s Housing Crisis is a Chance to Change the Narrative and Fix the Future

By Zane Fischer, CEO, Extraordinary Structures

A Good House is Hard to Find

Death and taxes may be certain, but food and shelter are non-negotiable. In the United States, we waste a lot of food, but we’re running out of houses. In a society ostensibly dedicated to life, liberty, and the pursuit of happiness, the right to protection from the elements seems distinctly absent.

This lack of moral imperative to ensure housing is especially troubling because the home fills such fundamental roles in our collective cultural drama. Home ownership is the primary lever of wealth generation. The home itself is a status symbol, along with its location, and is a foremost method of consumer participation – get a house, fill it with stuff. The data for quarterly housing starts is a harbinger of what’s to come in retail, manufacturing and utilities markets.

Our shared mythologies tell us home is sweet, home is where the heart is and there’s no place like it. But the state of play tells us access to these idylls is increasingly dependent on privilege. The United States is in a full-blown housing crisis and it is intrinsically tied to our economy and our environment. The solutions lay in both our perception of equity around shelter and in where and how we choose to build new housing. Taking meaningful steps will require consensus around the scope of the problem and the political and economic will to empower appropriate initiatives.

Backed into a Cul de Sac

The number of us truly without homes is increasing by staggering amounts. The Los Angeles Homeless Services Authority reported in June that the homeless population in Los Angeles County had increased by 12 percent from 2018, to about 58,900[1] or a few hundred more than the total population of Dubuque, Iowa.

Beyond those living in the streets, 11 million Americans spend more than 50 percent of their income on rent.[2] Over 50 million Americans can’t meet their basic monthly bills.[3] And between 2000 and 2015 the United States produced 7.3 million fewer homes than required just to keep up with demand and population growth.[4]

Housing supply in our economic epicenters is radically constricted. A salary over $237,000 per year is required to afford the mortgage on a median priced home in San Jose, CA[5] – and that’s considered an improvement over last year. Silicon Valley may be an extreme example, but it’s hard to find an area of economic opportunity where restrictive housing supply isn’t escalating prices and pushing the workforce further away and closer to compromised budgets.

Meanwhile, early- and mid-20th century segregation tactics placed restrictions on infill and higher density – the result of which has been a pervasive sprawl exacerbating human impact on climate change. We’ve regulated ourselves out of building where it makes the most economic and environmental sense and now attempts to repair our dramatic housing shortage break against the bow of blasé land use bureaucracy. Finally, two decades of “disruptive innovation” in the wider economy has failed to have much of an impact on a conservative and stoic construction industry. Stringent building codes, an aging workforce, iffy immigration policies, and a well-established system of sub-contractors each playing their individual roles over and over again doesn’t create much of an environment for lateral thinking.

small-scaleDeveloper-landUsecode-ZaneFischer
Targeted changes to land use code can increase housing supply and boost local economies by encouraging small-scale developers who are genuine stakeholders in their communities. The goal is a variety of uses that scale over time appropriate to the needs of a given neighborhood. This approached is championed nationally in the U.S. by the Incremental Development Alliance. Image courtesy of: Incremental Development Alliance

 

Tune In, Turn On, and Build Houses

Increasing our housing supply will eventually lower prices, but in aggregate and over time. The supply to demand relationship feels like slow motion. This is compounded by the general persistent increase in property values, some markets being more constrained than others due to geography or regulation, shortages in skilled labor, escalating costs of construction, increased material expenses due to hurricanes and fires, trade disputes – all of these factors and more conspire against simply “building more houses.”

We need to begin by specifically building more affordable housing. Not subjectively “affordable” housing, but housing in which the cost is subsidized and the use is income-verified. This means states, counties and municipalities getting serious about issuing bonds and directing tax revenues toward affordable housing. It also means a true “housing first” policy when it comes to addressing homelessness. Putting people into homes and providing active case workers costs less money than trying to manage homelessness through policing and emergency medical care. Various studies project different levels of savings, but every study shows savings.

Next, we embrace what Scott Wiener and Daniel Kammen wrote in The New York Times this year: “housing policy is climate policy.” This should give progressive civic leaders the courage to shift land use regulations toward higher densities and increased infill. Milwaukee’s 2040 plan eliminates single family zoning and allows such lots to become triplexes going forward. Because inordinate amounts of land are dedicated to single family zoning, this simple change paves the path for a dramatic shift in supply over time. It also opens a path for small-scale developers to work mindfully within their own communities, a non-threatening model known as “incremental development.”

Lastly, we can push our construction industry toward greater efficiency while creating better paying jobs for its workforce and using more environmentally friendly practices. The benefits of modern panelized construction include increased quality control, decreased labor hours, decreased construction time, and radical reduction of waste material. What’s more, the increasing ubiquity of the required equipment means most communities can have panelized facilities nearby – jobs can be local and we can reduce carbon-intensive delivery. One of the few areas of bipartisan support in Congress is for workforce development and manufacturing. Because of this uncommon accord, there are substantial federal funds available to pursue such initiatives.

By remembering that housing should be a right and committing our public resources to providing it, we can increase supply where it’s most needed in the short-term. By shifting our land-use regulations to be in alignment with our economic and environmental values, we can ensure our housing supply grows in a sustainable fashion over the long-term. And by partnering our construction industry with advanced manufacturing techniques, we can ensure we have the workforce to deliver that supply for the foreseeable future.

 

Article by Zane Fischer, CEO of Extraordinary Structures which designs modular components for small structures. He is a founder of MAKE Santa Fe, a makerspace with an emphasis on economic and workforce development and a founding board member of MIX, inc. a non-profit consultancy that creates community solutions through collective ingenuity.

Article Footnotes

[1] LAHSA Greater Los Angeles Homeless Count 2019
[2] Center on Budget and Policy Priorities Analysis of Census data
[3] United Way Alice Project
[4] Up For Growth, Housing Underproduction in the U.S.
[5] HSH analysis of National Association of Realtors first quarter 2019 data and current 30-year fixed rate mortgage

Energy & Climate, Featured Articles, Sustainable Business

Comment

  • Excellent article, very well thought and very well written. Affordable housing is one of the foremost “frontiers” of our time, a fundamental need, the gateway to wealth accumulation for all, rich and not-so-rich, and unfortunately a battleground where some today are seeking to maintain their supremacy by limiting supply and access and preventing the poor from climbing the ladder of material comfort, and eventually economic success and overall education. Our society, our economy, our long-term prosperity are directly threatened by this self-imposed limitation that hurts a growing segment of our population. I believe that the insane rise of the cost of housing in America epitomizes a “spirit of exploitation” that’s the cancer of the American Dream. And this cancer might eventually destroy the American Dream and society altogether and turn the country instead into a battleground of sorts between the rich and the poor.

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