Council Members:
Re affordable housing on parking lots. Pat Marriott
https://www.mercurynews.com/2025/11/29/klein-heres-how-bad-the-u-s-housing-crisis-is-and-what-can-be-done-about-it/
Klein: Here’s how bad the U.S.housing crisis is — and what can be done about it
Between 1950 and 2020, productivity inthe manufacturing sector rose by more than 900% while it fell for homebuilding
By Ezra Klein PUBLISHED: November29, 2025 at 3:15 AM PST
Thehousing market keeps getting worse. Home prices have risen more than 50% sincethe pandemic. About a third of American households now spend more than 30% oftheir income on housing. In 2014, the median age of a first-time homebuyer was31. In 2025, it was 40 — the highest on record.
Thecore of the problem is simple: Too much money chasing too few homes. How manymore homes does America need? I’ve seen estimates ranging from 2 million to 5million. It’s a shortage decades in the making — and one we’re nowhere near ontrack to solving. In 2025, America built fewer homes per 100,000 people than itdid in 2005, 1995, 1985 or 1975.
EveryWhite House since President Barack Obama’s administration has recognized theneed to build more homes but the results, under both Democrats and Republicans,have been anemic. Housing is a hard problem to solve from the Oval Office.Zoning and building rules are set at the state and local levels. Interest ratesare set by the Federal Reserve. In 2024, Kamala Harris promised to build 3million new homes and released a plan that no housing expert I spoke to thoughtcould come anywhere near achieving that goal.
“ Thething that I think we learned is that federal housing policy is stuck in areally weak equilibrium,” said Jared Bernstein, who led President Joe Biden’sCouncil of Economic Advisers. “There is just far too little asked of cities andstates. They won’t do much to push back on the barriers that are blockingaffordable housing.”
Bernstein,who is now a senior fellow at the Center for American Progress, wants to changethat. He’s among the authors of a new housing plan that tries to deliver thenext administration a set of solutions nearer to the scale of the problem.
Federal incentives
Atthe core of the center’s plan is an idea it calls “Rent Relief for Reform.” Idon’t love the name, but I like the idea: Places with a housing shortage — andthat’s a lot of them — get a choice. Build the housing and the federalgovernment will give all the renters in the city up to $1,000 off their rent —or don’t build the housing and lose access to certain federal grants.
TheSearchlight Institute, a new Democratic think tank, recently proposed a similaridea. In that version, cities and other places that hit ambitious housingtargets would qualify for a federal rebate that would give every household — soboth homeowners and renters — a check equal to the average increase in rentover the last year. In other words, build enough housing and the federalgovernment will give the people who live near that housing money.
Boththose ideas are trying to solve the hard problem at the heart of housingpolitics: It’s the people who already have homes who have a voice in localpolitics and planning. They often like their neighborhood the way it is. Theydon’t want more traffic or new neighbors or the hassle of nearby construction.What’s in it for them?
“Youcan put this kind of crassly as you’re incentivizing renters to show up atlocal elections and push their elected officials to do things that arerenter-friendly, which I don’t hate as a strategy,” said Jenny Schuetz, wholeads housing policy at Arnold Ventures. “If most renters showed up in theprimaries and demanded that their mayor and City Council actually do goodthings, we could have some pretty different outcomes. But mostly renters don’tshow up — particularly in the primary — and so you get thesehomeowner-dominated coalitions in cities that make it hard to build.”
Modular housing
Theother big idea in the Center for American Progress plan is to change the way webuild housing in America. “If you go back to 1910, somebody showed up with atoolbox and a hammer to build a house,” Bernstein said. “And if you go to 2025,it’s the same damn thing. This is the one sector where productivity has beenliterally falling for five decades while everything else has been going up.”
Thecomparison that often gets made here is to manufacturing. Between 1950 and2020, productivity in the manufacturing sector — how much you could producewith the same number of workers — rose by more than 900%. That’s a big part ofwhy everything from tables to televisions is cheaper today than decades ago.But over the same period, productivity in the construction sector has fallen.That’s not the only reason housing is so expensive today, but it’s part of it.
Butyou can manufacture housing — constructing homes in an off-site factory muchthe way we construct cars and then shipping them for final assembly. This istechnology pioneered in the United States when George Romney, Mitt Romney’sfather, served as secretary of housing and urban development during the Nixonadministration. But the United States never figured out the rules nor thefinancing to make an industry out of it. Instead, it’s taken hold elsewhere. InSweden, for example, more than 40% of new homes — and more than 80% ofsingle-family homes — are fabricated off-site.
TheCenter for American Progress’s plan proposes a slew of projects to take thisindustry America invented and make it one where America is a leader. They wantthe government to seed a major research program to fund innovation in housingconstruction. They want to have the federal government leverage its purchasingpower to become an initial buyer for modular housing — one idea here would beto have the Department of Defense upgrade its military base housing usingmodular construction. They want to modernize building codes to make modulareasier — removing, for instance, an outdated federal requirement to attach apermanent steel chassis to all modular construction — and updating federalinsurance and financing rules to make sure modular production qualifies.
Unaffordable housing
Youcould imagine states and cities acting even before the federal government does.“New York was once a beacon of creative, public sector-led, affordable housingproduction,” says Mayor-elect Zohran Mamdani’s housing plan. “But decades ofdisinvestment and shrinking government capacity have left us waiting on thereal estate industry to solve a housing crisis from which they profit.”
Left unsaid in his plan is thatpublicly subsidized, affordable housing has become monstrously expensive toconstruct because the public money triggers rules and process and reviews andnegotiations that market-rate housing doesn’t contend with. A Rand study foundthat, per square foot, affordable housing cost more than 1.5 times as much tobuild in California as market-rate housing; a Washington Post investigationrevealed an affordable housing development in D.C. where the units cost$800,000 each to build, even as the same developer was building market-rateunits for $350,000 next door. One reason we don’t build enough affordablehousing is we’ve made affordable housing unaffordable to build.
Mamdaniproposed investing $100 billion to build 200,000 “publicly subsidized,permanently affordable, union-built, rent-stabilized homes” over the nextdecade. That works out to $500,000 per unit — if all goes well. What if NewYork City became a test case for how modular construction could allow publichousing, ordered and built at massive scale, in unionized factories, to becomecheaper and faster to build than market-rate housing? If it was only $350,000per unit, that would mean building almost 300,000 units for the same cost.
Oneproblem the modular housing industry has faced is the absence of steady demandto keep the factories running and work out the kinks of construction. A placelike New York City that wanted to build public housing at scale, over a longperiod of time, could create that steady demand and use it to seed an industry— New York could become America’s leader in modular construction.
Perhapsthat’s fanciful. But our thinking on housing — both public and private — hasbeen far too small for far too long. We’ve accepted shocking cost increasespaired with stagnating productivity. We’ve made it impossible for tens ofmillions of families to build the lives they want in the cities they’d ideallychoose. At this point, making it possible to build more housing just isn’tenough. We need to change how we build housing. I don’t know ifmodular housing is really the answer. But it’s worth trying.
EzraKlein is a New York Times columnist.
