Mortgage

Lack of housing construction leaving downtown overcrowded

Only the rich can afford it

More Americans want to live downtown, but the problem is there simply isn’t enough room for everyone.

And as a result, according to an article in Bloomberg by Patrick Clark, developers are focusing on center-city neighborhoods where high-density building is allowed, creating highly expensive units.  

From the article:

At some point, said Issi Romem, chief economist at BuildZoom, vacant lots in desirable urban neighborhoods will run out.

What happens next depends on whether voters and their elected officials rewrite zoning rules to allow denser construction, said Romem, particularly in neighborhoods currently limited to single-family homes. Under current rules, he said, it’s unlikely new housing will get built at affordable prices, pushing city-dwellers into a game of musical chairs rigged to favor the rich.

The article explained that historically, when cities became overcrowded, they would start to build out. Cities like Dallas and Austin are good examples of this, but unfortunately, cities like New York and San Francisco keep building new high-end apartments.

Lynn Fisher, the Mortgage Bankers Association’s vice president of research and economics, previously told HousingWire that there will roughly be 13 million to 16 million additional households in the U.S. over the next decade.

And while multifamily has managed to catch back up in supply, she explained single-family housing still has a ways to go. 

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3d rendering of a row of luxury townhouses along a street

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