As plans for the nation’s infrastructure take shape, real estate professionals and industry experts say fixing housing shortages needs to be a critical part of the conversation.
“Housing is an essential long-term asset that helps families climb the economic ladder to prosperity, brings folks closer to job opportunities and generates tax revenue that supports community residents,” said Charlie Oppler, president of the National Association of REALTORS® (NAR).
NAR hosted a virtual event on July 15 that focused on how policymakers and industry stakeholders could address the nation’s historic housing supply shortage.
Oppler acknowledged President Biden’s plans to invest in housing and generate two million additional homes in the U.S. through construction and rehabilitation, but based on recent reports from NAR, that may not be enough to meet the lingering shortage of homes needed nationwide.
Industry experts assessed the findings in NAR’s recently released report, “Housing Is Critical Infrastructure: Social and Economic Benefits of Building More Housing,” which painted a clearer picture of the nation’s decades-long underbuilding gap.
While the report focused on the 5.5 million housing unit gap, experts said the number is much closer to 6.8 million when considering other factors in the market.
“When you look at the combination of building housing to meet the demand from new household formation plus replacing existing stock that’s lost, we have a very large gap each year,” said David Bank, senior vice president of Rosen Consulting Group, which co-authored the report.
According to Banks, the shortage of available and affordable housing stock has stymied young adults looking to move out of their parents’ houses and into their own homes.
He also highlighted the growing number of existing homes in the market that are decades old and need renovation or rehabilitation.
“Looking back about 20 years ago, about a third of our housing was at least 40 years old in this country,” Banks said. “Today, that is more than half of all housing in the country. We’ve got just barely 7% of housing in the country that’s built in the last ten years as of 2019.”
Based on current trends in home construction and investment, Banks indicated that it would take almost two decades to fill the gap of housing units.
Banks also connected the NAR report and the president’s infrastructure ambitions in his remarks during the event.
“If we are going to build new highways or new bridges or new broadband internet, we need to think about ‘who are the communities and people that are going to be using those services?’,” he said. “Where are we going to live, and how are they going to be able to afford the housing?.It’s for that reason that we think it’s so important to have a coordinated approach to housing construction as part of an infrastructure strategy.”
A top official from the U.S. Department of Housing and Urban Development (HUD) also joined policy experts from NAR during the event to discuss strategies federal officials are considering to improve the housing supply.
Alanna McCargo, HUD’s senior advisor, indicated that several approaches and policies would be needed to fix the longstanding problem.
“There are not really any silver bullets,” said McCargo, adding the administration will take a serious look at how they can speed up renovation and rehabilitation construction efforts.
McCargo also highlighted the importance of working on the local level to reform zoning and land-use policies and noted that the rising construction costs must be addressed.
“Aggressive renovation and rehab process, and also building resiliency and energy efficiency into that for the future, are going to be really key approaches that the administration is prioritizing,” she concluded.
Jordan Grice is RISMedia’s associate content editor. Email him your real estate news ideas to jgrice@rismedia.com.
