How to Repair America’s Broken Housing System — with Dr. Jenny Schuetz
Nov 14, 2024
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Dr. Jenny Schuetz, a leading economist and housing policy expert, dives into America's housing crisis. She discusses the complex interplay between economic factors, government policy, and wealth disparity. Schuetz highlights how young people struggle to achieve home ownership and start families due to rising costs and imbalances. The conversation touches on regional housing trends, the influence of private equity, and innovative solutions for affordability. Listeners gain insights into how the pandemic has shifted perceptions of homeownership and the evolving demands of the housing market.
The podcast highlights the detrimental effects of restrictive zoning laws on affordable housing development and the need for innovative policy reforms.
Dr. Schuetz discusses the NIMBYism phenomenon, revealing a potential shift in homeowner attitudes towards supporting new housing construction for future generations.
Economic inequality's growing impact on housing affordability illustrates the disparity between high-income individuals and struggling low- to middle-income families.
Deep dives
Challenges in Housing Supply
The podcast discusses the critical challenges facing the American housing market, particularly the shortage of affordable housing. It emphasizes that local governments often complicate housing development processes through restrictive zoning laws that favor single-family homes. Current policies favorting established homeowners often limit the types of housing that can be constructed, contributing to increased rents and home prices. Addressing these issues will require innovative policy solutions to enable the construction of more diverse housing options and to streamline permitting processes.
The Role of NIMBYism
Resistance to new housing developments, often referred to as NIMBYism (Not In My Backyard), is explored as a significant barrier to addressing housing shortages. Although there is a perception that homeowners universally oppose new construction, emerging research suggests that resistance may not be as prevalent among long-term residents as assumed. Many homeowners recognize the need for increased housing supply, particularly for their children and younger generations. The challenge remains in convincing policymakers that a larger portion of voters may actually support growth and development.
State-Level Initiatives
State governments are starting to reclaim authority over local zoning laws as they recognize the economic repercussions of inadequate housing supply. Politicians are beginning to impose requirements on municipalities to allow more significant housing developments, especially near transit hubs. This trend shows promise as states push back against localized NIMBYism that hinders economic growth. The experiences of cities like Minnesota and Texas serve as examples of effective policies that have facilitated housing development.
Economic Disparities and Housing Affordability
Economic inequality and its impact on housing affordability is another focus. The growing divide between high-income individuals who increasingly dominate housing markets and low- to middle-income families struggling to find affordable options is concerning. Many financially secure individuals have shifted their housing preferences toward larger, more amenity-rich accommodations, exacerbating the affordability crisis. This result is a growing acceptance of renting long-term among younger generations, which can affect social mobility and economic stability.
Coping with Homeownership Challenges
The podcast addresses the emotional and financial implications of homeownership in light of rising costs and interest rates. Current homeowners, particularly those locked into lower mortgage rates, face significant disincentives to move, leading to a stagnation in the housing market. Factors such as rising property taxes, insurance rates, and the evolving understanding of the financial risks associated with homeownership contribute to a reluctance to sell. Ultimately, a reassessment of societal values surrounding homeownership versus renting may be necessary to adapt to these changing economic realities.
Dr. Jenny Schuetz, a nationally renowned economist, author, and policy expert on housing and land use, joins Scott to discuss trends and structural shifts occurring in the housing market, America’s broken housing system, and potential policy solutions.