America has a housing shortage – no doubt about it.
Freddie Mac says the housing market is missing 3.3 million homes. Many of the builders wiped out during the financial crisis never got back in the game, and the immigrant workers who made up about a quarter of their crews haven’t all returned. Plus, there’s a shortage of buildable lots in some areas of the country, and a maze of regulations addressing safety issues and climate change that make it difficult for homebuilders to keep up with household formation.
But is the answer overturning single-family zoning?
Perhaps, in some areas of the country, the answer is yes. But keep in mind it’s a multi-trillion-dollar experiment because no one knows what impact it will have on property values if multifamily structures can be plunked down amid suburban houses.
As we have the debate on how to help more families find a place to live, let’s remember that for most people in America’s battered middle-class, their home is their largest financial asset. What’s it worth? As always, the measure of a home’s value is what a reasonable buyer would pay for it, quantified by recent sale prices of nearby comparable homes – what the industry calls “comps.”
What will those comps say if an area’s zoning is changed and apartment buildings are erected in a neighborhood of single-family homes?
Welcome to the experiment.
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