An Emerging Housing Crisis?

By Caroline Sutton, Executive Officer, Asheville Home Builders Association

Nationally acclaimed academics and authors Wendell Cox and Joel Kotkin have recently made the case for an emerging housing crisis in America. They cite “a growing gap between the amount of new housing being built and the growth of demand.”

They write that “our still-youthful demographics are catching up with us. After a recession generated drought, household formation is again on the rise,” citing data from the Harvard Joint Center for Housing Studies. And from another study, they report, “the country is building barely one-third the number (of new homes) needed to meet the growth in households.” Certainly the warning from Cox and Kotkin presents a good-news opportunity for those of us in the home building industry. We need to carefully assess the demographics, in and out migration patterns for our area, job creation data, and then build the right product at the right price for the prospective buyers.

From a national perspective, the two authors state, “the groups most likely to be hurt by the shortfall in housing include young families, the poor and renters. These groups include a disproportionate share of minorities, who are more likely to have lower incomes than the population in general.” Cox and Kotkin then point to the correlation between government regulation and the increased cost of housing—a relationship that drives new home prices beyond the point that many would-be buyers can afford. Put another way, NAHB economic experts calculate that for every $1,000 increase in the price of the typical new home, some 206,000 households are priced out of the market for that home.

While this situation presents an opportunity for those of us in the shelter industry, it also calls attention to the continued need for all of us to work—most often through the HBA—to influence government regulation in such a manner that we keep housing safe while also eliminating the “nice but not necessary” regulatory costs associated with new construction.

The authors further write, “Nothing speaks to the nature of the American future more than housing. If we fail to adequately house the current and future generations, we will be shortchanging our people and creating the basis for growing impoverishment and poor social outcomes across the country.” That is not a foregone conclusion for our nation’s future. We have the opportunity to create a bright and exciting future in safe, desirable neighborhoods with affordably priced homes. But doing so will require much diligence on our part—to study the demand, control the price points, and have those in government who make regulatory policy understand the extremely adverse impact their actions can have on our collective ability to improve the life and opportunity for many more of their citizens by building new homes for them.

That is what your HBA is all about—working to help create increased opportunities and a beneficial business climate that you often could not do on your own. Be sure you and all of your trade partners remain strongly committed to the HBA. It is for your own good, but also, for the good of our nation.

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