Findings from a recent Pulsenomics survey of 100 economists, investment strategists and real estate experts commissioned by Zillow indicates that housing starts will not reach normal levels (1M units/month) until at least 2022. More pessimistic estimates stretch out that timetable to 2029.
The majority (56%) of these experts and economists believes that the best solution to jack up inventory levels would be to “relax” local review regulations. 38% of the experts thought reducing mandatory lot sizes would help alleviate inventory shortages and 38% indicated that easing the land division process would go a long way towards impacting the problem.
Zillow’s Director of Economic Research, Skylar Olsen, said, “The American housing landscape was shaped in a big way by the drive for the classic American dream: swaths of cities were set aside solely for single-family detached homes, too large minimum lot sizes and slow local review processes…now, three decades later, housing affordability is a major issue across the country. These same policies …arguably limit the ability of (our) next generation to become homeowners.”
In light of this VERY large problem, some states and cities looking carefully at ways to stem the affordability problem AND provide more housing for more people. We’ve written here in the past that the state of Oregon and the city of Minneapolis have, in their various iterations, eliminated single-family zoning. Austin, Seattle and Berkeley CA are considering doing the same.
Zillow’s Olsen said, “Without new homes to meet population growth and replace an aging housing stock, home buying is expected to move further out of reach…the most popular solutions among experts…(are to) roll back these (out-of-date) rules to increase flexibility and get more (housing) projects through the process faster.”
Thanks to Marion McPherson and InmanNews for source data.