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There’s a sign posted in many small businesses that reads more or less like this: “Fast. Cheap. Quality Work. Pick any two.”
That brevity gets at a simple truth. You can get things fast and cheap, but the quality will suffer. Or you can opt for good quality and fast turnaround, but it won’t be cheap. And maybe, just maybe, you can get good quality at a cheap price, but you’ll have to wait for it.
A different but similar set of trade-offs bedevils efforts to resolve the affordable housing shortage. We can build cheaper houses, for example by increasing zoning density, but at the perceived cost of dragging down overall real estate values—almost invariably provoking local opposition from existing homeowners. Or we can build homes more quickly but at market rates, staving off NIMBYism but failing to meet the need for housing at prices that most people can afford. We can, in other words, view housing either as a form of wealth accumulation or as essential shelter. It’s not at all clear that we can do both.
Because of that simple disconnect, virtually every housing “solution” being tossed around not only misses the mark but often promises to make things worse. In recent weeks, for example, the Trump administration has floated the ideas of allowing 50-year mortgages, of banning institutional investors from buying single-family homes, and of having Fannie Mae and Freddie Mac buy $200 billion in mortgage bonds, a purchase we are assured will “make the cost of owning a home more affordable.” None of these proposals, you’ll note, do anything to increase the actual housing supply. All will, almost assuredly, increase the cost of housing.
“Whenever we subsidize mortgages, guess what? It all gets capitalized into home prices,” Stijn Van Nieuwerburgh, real estate and finance professor at Columbia University’s graduate school of business, told The Wall Street Journal. “All these demand subsidies don’t really work in a world where you don’t supply new housing.”
Given a generally agreed-upon shortage of 4 million homes nationally, housing “solutions” that don’t increase housing supply only prolong a game of musical chairs: someone will always be left out, regardless of mortgage terms or rates or whether corporate investors are barred from competing with individual homebuyers. And as in any market in which demand continues to outstrip supply, prices inexorably will move in only one direction. That’s presumably great news for anyone lucky enough to have grabbed a chair, but it’s a growing hardship for those without, and a tragedy for society overall.
Here’s how extreme things have become: Sen. Elissa Slotkin, D-Michigan, last week introduced a bill calling on the Trump administration to declare a national emergency over the housing crisis. For a Democrat to urge this administration to declare any kind of national emergency is like handing a gallon of gasoline to an arsonist, but the National Housing Emergency Act nevertheless seeks to prohibit state and local governments from imposing regulations that place “a substantial burden” on housing production, including many traditional zoning and other regulatory restrictions. The “period of the emergency” is to last until 2031, or until a goal of 4 million new housing units is met.
Slotkin’s bill springboards off the Defense Production Act (DPA) of 1950, which gives the U.S. president the authority to require businesses and corporations “to prioritize and accept contracts for materials and services as necessary to promote the national defense”—shifting housing intervention under the same umbrella of federal overreach as the Trumpian rationale for bombing fishing boats and its incursion into Venezuela. So, for example, the proposed National Housing Emergency Act would extend the DPA’s “materials and services” coverage to include not just lumber and steel but also manufactured housing.
But the act goes further. It also introduces a “pro-growth requirement” for state and local governments to receive federal block grant funding. And, significantly, it pushes states and localities to change their laws to allow commercial properties to be turned into housing, eliminate single-family zoning and allow for accessory dwelling units, sometimes referred to as “in-law suites” or “granny flats.” It also bars states and localities from passing laws, rules or regulations that would impair the build-out or rehab of housing during the emergency—arguably all desirable provisions, but at the cost of severely slashing local autonomy in an area long regarded as outside of state and federal control.
It’s too early to tell whether Slotkin’s bill will make any headway, although its lack of bipartisan support suggests not. But think of it as a canary in the coal mine, a warning signal of a growing sense of helplessness and frustration at the national level over a crisis that historically has been beyond federal purview. It also attests to the willingness of at least some Democrats to have the federal government throw its weight around at a grassroots level, in which case we’ll have only ourselves to blame. Zoning, building codes, land-use patterns—these are all local responsibilities, or have been until now, but failure to meet those responsibilities adequately invites intervention.
Fast. Cheap. Quality work. There are always trade-offs. We can act on an understanding that everyone needs a place where they can live within their means; or we can continue to view our homes as wealth generators that must be protected as investments. If we don’t mediate that conflict at a local level, and soon, we run the risk of having someone else do it for us.
Looking askance 