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Tuesday, March 28, 2023

What can be done to end the housing shortage in America?

Housing construction is still experiencing the end of the recession that occurred between 2007 and 2009.

Photo: Al Bello / Getty Images

The United States is on edge due to the lack of housing. The quality of life of families and the economy is seriously affected by this phenomenon, which is no longer exclusive to some states becoming national.

According to Freddie Mac, it is estimated that losses exceed three million units, a figure doubling between 2012 and 2019. Added to the above are the consequences generated by the pandemic. This causes housing and rental prices to skyrocket, as new remote working conditions have led to increased demand, which means the search for larger spaces and city changes.

Another deciding factor for the housing deficit has been the historic low interest rates, which mainly led to a buying boom. millennium, There are many young adults today who want to move out of their parents’ home but can’t afford to relocate, or roommates who prefer to be alone if they can.

Housing construction is still experiencing the backlash of the recession that occurred between 2007 and 2009 and has left demands on the high cost of land, lack of credit for builders and buyers, increased material costs and local governments.

Various solutions can be explored, but many, unfortunately, are not in the hands of builders, as they depend on economic, social and health factors (in the case of a pandemic). For builders, the answer focuses on efficiency in the entire process, from land acquisition to the final product.

The US government has made efforts to remove barriers to supply chains. Similarly, it has tried to dissuade local and state officials from imposing restrictions. However, such efforts have fallen short. We continue to face demands from local governments, which generate cost overruns, inefficiencies, waste and delays in new development. These are economic policies that make it difficult for North Americans to access credit for home purchases and that increase costs in the construction chain. Thus, clearly, the offer decreases and the prices resulting from higher demand go up.

The capacity of the land for construction should be made more flexible. In other words, currently, on land where between 40 and 50 units can be developed, only 30 are built due to restrictions. This generates cost escalation and inefficiency in land use.

*Michael J. Newell is a real estate developer, @michaeljnewell

World Nation News Desk
World Nation News Deskhttps://worldnationnews.com/
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