Do you have numbers to back that up? If anything, underbuilding came from a moribund housing market after 2008, as many left the industry and it took way too long to ramp up on talent when housing began to boom again (a lack of people skilled in building houses is still a problem).
But I doubt this is an under building problem at all. Look at Seattle and the area, and there isn’t a shortage of new housing projects at all. They are mostly all luxury, which is the only way builders can make a profit on high land prices, and they sell very quickly regardless.
The U.S. built on average 276,000 fewer homes per year between 2001 and 2020 compared to the period between 1968 and 2000, according to the report which was covered earlier by the Wall Street Journal.
Had building continued at the same pace, there would be 5.5 million more units of housing, the report estimated.
To make up the shortage, the NAR report says the U.S. would have to build 2.1 million homes each year for a decade—more than it built each year during the housing boom of the mid-2000s.
So you compared a 32-year period with a couple of technical recessions and one relatively brief stagflation period averaged over huge growth with an 18-year period dominated by the Great Recession?
Would it be interesting to point out that the US population growth also was much higher in the 1968-2000 period compared to 2001-2020 period on an annual basis?
Why are you comparing a 19 year period to a 32 year period? Ah, I see it is a per year measure.
Well, it isn’t weird that land runs out for new subdivisions. What is left is to build more dense (replace single family housing with apartments or town homes). Still, why is it zoning per se that is the problem rather than just the market? They have the same pricing problems elsewhere in countries with building booms (eg China).
> dense housing is frequently not permitted by zoning. sometimes housing itself isn't permitted.
But where they are permitted, housing prices are still high. Higher even, like NYC and much of New Jersey near NYC. Is there a good example where increased density has led to lower prices, not higher ones?
Most of the area in those places still has significant zoning restrictions on density--the cap is higher than other places, but there's still a cap. That's why there are still brownstones in Brooklyn.
Second, the economics of building dictate that skyscraper-level density will only happen in places where housing is relatively expensive. But there are plenty of examples of density leading to lower prices, in the suburbs.
> But there are plenty of examples of density leading to lower prices, in the suburbs.
Do you have specific examples? The only places I can think of are economically depressed (e.g. in the midwest, or in Florida swampland) and aren't particularly dense.
Maybe Houston? Houston is famous for having almost no zoning, but even Houston seems to be heating up these days.
I found the section "New Evidence on the Effects
of Land-Use Regulation" to be quite interesting in past reads (and discussions) and probably relevant.
You can make a rough comparison by looking at housing starts in Japan[1] vs USA[2] housing starts. Housing cost in Japan has been flat even in major metros like Tokyo. They also build 2-3x as many houses over the long term according to the data cited.
Seattle is a weird example for me (anecdotally). When I lived there in 2017-18 I found the rental market to be great. The city had incentivized building rental units and as a result there were great deals to be had. I was able to negotiate a 15% discount and dictate the length of my lease on Capitol Hill. I don't know what it looks like now, but it was great at the time.
Japan builds a lot of houses because they tear them down after 20 or 30 years. What is Japan's net gain (housing starts - housing ends) per year, not just the number of units started?
> When I lived there in 2017-18 I found the rental market to be great.
The market was weaker in 2017 because of all the new rental capacity that came online. That capacity has long been filled and rents are skyrocketing ATM.
>>We quantify the amount of spatial misallocation of labor across US cities and its aggregate costs. Misallocation arises because high productivity cities like New York and the San Francisco Bay Area have adopted stringent restrictions to new housing supply, effectively limiting the number of workers who have access to such high productivity. Using a spatial equilibrium model and data from 220 metropolitan areas we find that these constraints lowered aggregate US growth by 36 percent from 1964 to 2009.
But I doubt this is an under building problem at all. Look at Seattle and the area, and there isn’t a shortage of new housing projects at all. They are mostly all luxury, which is the only way builders can make a profit on high land prices, and they sell very quickly regardless.