1 simple legislative fix needed to solve America’s housing crisis
The U.S. House passed the “Housing for the 21st Century Act” in February. The Senate responded this month with a bill that includes much of the House bill, which it named the “21st Century ROAD to Housing Act.” Both are supposed to increase housing supply and thus bring down costs for would-be buyers. At least, that is the claim of supporters of the legislation.
As of last Thursday, March 12, the Senate passed its version with an overwhelming 89-10 vote. However, the bill now faces an uncertain path back in the House, where some Republican lawmakers are raising concerns over certain provisions, especially the bill’s prohibition of a central bank digital currency.
There are some more serious concerns that should be considered before enacting this legislation, which cut to the heart of the legislation’s key claim. Will the bill in fact solve the U.S. housing crisis?
As business-news site QZ aptly reported: “Critics note that the bills don’t directly address how to solve the housing shortage or how to increase new construction funding.”
There is a multi-million-unit shortage of housing in the U.S. Depending on the source, the estimates of how many millions of units are needed range from 4 to 8+ million housing units. Without closing that gap, the housing crisis will not be solved, regardless of what a politician or special interest group may claim. To illustrate that point, consider the following from the U.S. Department of Housing and Urban Development:
* HUD Policy, Development and Research team members Pamela Blumenthal and Regina Gray said: “Without significant new supply, cost burdens are likely to increase as current home prices reach all-time highs …”
* The National Association of Home Builders (NAHB) repeatedly admitted it cannot build enough conventional housing people can afford.
Let’s be clear: There is site-built “conventional” housing and factory-built housing. Most housing in the U.S. is currently produced by conventional builders. According to the Urban Institute, “Lack of Housing Supply Is Largely Responsible for High Home Prices and Rents,” and current data proves that point.
For those who need more evidence that conventional housing can’t close the supply gap, NAHB admits site-built housing is at too high a price, and cannot be sufficiently subsidized to make it affordable.
UnidosUS, which apparently favors the Senate bill, posted the following via Facebook.
“Housing for the 21st Century Act. If passed, this bill could create or preserve some 1.3 million affordable homes over 10 years, about 400,000 units over the current projections.”
Look at UnidosUS’ remarks carefully. It isn’t claiming 1.3 million units will be built over the next decade, but rather, that a combination of production and preservation will occur. Yet Pew said 4 to 7 million units are needed now.
Put simply, the bill the Senate sent to the House – which already included much of the House’s provisions – won’t close the housing supply gap.
That means prices will continue to rise, and millions of Americans will continue to be priced out of housing because it is simply not affordable.
A key problem is zoning barriers that are barring the most affordable form of factory-built housing. That would be modern HUD Code manufactured homes.
Those zoning barriers and “red tape” are often local.
There are over 33,000 local zoning jurisdictions in the United States, according to the National Zoning Atlas.
Per HUD’s Blumenthal and Gray: “The regulatory environment – federal, state and local – that contributes to the extensive mismatch between supply and need has worsened over time.” They wrote: “Federally sponsored commissions, task forces and councils under both Democratic and Republican administrations have examined the effects of land use regulations on affordable housing for more than 50 years. Numerous studies find land use regulations that limit the number of new units that can be built or impose significant costs on development through fees and long approval processes drive up housing costs. Research indicates higher housing costs also drive up program costs for federal assistance, reducing the funds available to serve additional households.”
So, for over five decades, public officials have known the source of the problem. Which begs the question: Why doesn’t either the House or Senate bill directly tackle the zoning barrier and local regulatory issues?
From the Senate two-pager in support of the bill: “MYTH: The 21st Century ROAD to Housing Act preempts local zoning decisions. FACT: By design, the 21st Century ROAD to Housing Act does not preempt local or state zoning. This is one reason why the U.S. Conference of Mayors and the National League of Cities support the bill. Chairman Scott believes zoning decisions are best made locally, not in Washington.”
Indeed, one reason many local officials may like the bill is because in its present form, the Senate and House bills empower them.
In their current forms, neither the House nor Senate bills will increase housing supply enough due in large part to the fact that they don’t challenge the NIMBYism (“Not in my back yard”) that drives barriers to inherently affordable manufactured homes.
The Manufactured Housing Association for Regulatory Reform (MHARR) met with congressional staffers to explain that two amendments are needed to make either bill workable, where the legislation will actually do what supporters claim it will do.
To underscore MHARR’s point, Pew Research reports: “States Take Crucial Steps to Expand Supply of Lower-Cost Single-Family Homes.” According to Pew: “The urgency to build more homes grows as the nation confronts a widespread housing shortage, estimated at 4 million to 7 million homes.” “During the past five years, nine states have enacted zoning reforms to facilitate use of manufactured homes, which typically cost 45% less per square foot than traditional site-built homes as a housing option in more neighborhoods.”
Polk County, Fla., Commissioner Bill Braswell aptly said this:
“Americans have demanded a solution to the affordable housing crisis. That discussion almost
always begins with the question: What is government going to do about it? My view is simple. Government is not capable of solving this problem and history proves it. We have all seen government housing projects. Many from the past became centers of crime and blight.
“… Unfortunately, manufactured housing, commonly referred to as mobile homes, has been stigmatized for decades. Local governments across the country have often regulated them out of existence, based on outdated perceptions that no longer reflect reality.
“Today’s manufactured homes are built to dramatically higher standards than in the past. They are safer, more energy-efficient, more storm-resistant and far more attractive than older models. They can be installed quickly, and most importantly, they remain one of the only truly affordable paths to homeownership.”
Award-winning Florida newspaper publisher David Dunn-Rankin grasps and emphasizes Braswell’s point:
“You’ve heard all the objections to more manufactured homes. First, the big one: ‘I don’t want to live next door to White Trash. They will trash the value of my home.’ …
“If you think that way, you are not alone. According to a University of Georgia study, 90% of people believe manufactured homes will tank their property values. Spoiler alert: According to the study, 90% of us are wrong. …
“Another significant objection is, ‘Those people will raise the crime rate.’ Except that is not true either. A HUD-funded study found crime rates in mobile home parks are basically the same as everywhere else …
“We know that traditional builders won’t touch starter homes thanks to Florida’s back-breaking regulations, so Florida’s young adults are packing up and moving out because our young people are being priced out of Florida.”
Dunn-Rankin knows it isn’t just in Florida that young people can’t afford new housing; it is a national problem that impacts an array of demographic groups. But according to 2022 research by the Federal Home Loan Mortgage Corporation (Freddie Mac), “Majority of Consumers Would Consider Buying a Manufactured Home.”
It appears that neither Democrats nor Republicans want to deal with a core issue, and that would be the need to overcome local zoning barriers.
Per the National League of Cities: “Just as important for local governments, the package does not preempt local land-use or zoning authority and avoids unfunded mandates. NLC worked closely with Members of the House Financial Services Committee and the Senate Banking Committee on their respective bills and later on the assembly of the comprehensive legislative package. NLC supports the 21st Century ROAD to Housing Act, as highlighted in a Myths vs. Facts document (PDF) made available by the Senate Banking Committee, which says, in part, “Chairman (Tim) Scott (R-SC) believes zoning decisions are best made locally, not in Washington.”
Google’s Gemini artificial intelligence put the estimated figure of housing units needed in the U.S. at some 5 to 8 million units. Gemini asserted the crisis is a “man-made” crisis because special interests apparently want the status quo, while posturing efforts to fix the crisis.
The Manufactured Housing Association for Regulatory Reform is calling for amendments to enforce previously enacted provisions of the bipartisan Manufactured Housing Improvement Act of 2000 commonly known as “enhanced preemption.”
Think of the housing crisis like the border crisis: In each case, the failure to properly and fully enforce existing laws has caused a major array of problems. The MHARR solution doesn’t require new taxpayer subsidies.
Failure to deal with the core concerns means allowing the problems to get worse. While Joe Biden and Kamala Harris were in office and near-record peacetime levels of federal spending were common, homelessness hit an all-time high of some 771,000 nationally.
Instead of allowing special interests to benefit from the status quo by again hoodwinking the public because it is a midterm election year, lawmakers should find the integrity and intestinal fortitude to support the MHARR amendments to the pending versions of the House and Senate housing legislation. Again, no new federal spending is needed.
As the above linked evidence demonstrates, anything other than dealing with local zoning barriers will fail to close the gap. The production gap between supply and demand must be closed and manufactured homes can do it without taxpayer subsidies. All kinds of new housing are needed. But without addressing the need for many more manufactured homes, currently too often barred by local zoning, anything else is posturing a solution and hoping the public won’t realize what happened until after the next election.
May God give lawmakers the courage to fight special interests and deliver what the public needs – millions of more affordable homes.