Building Affordable Housing Faces Obstacles in Costs, Bureaucracy and Inertia
America’s chronic housing shortage has contributed to homelessness, housing instability and housing affordability. It also may be crimping that most American of traits: mobility and hope for a better future.
“The thing that once made America distinctive, the thing that when people came over here from Europe, they noticed right away was that Americans tended to move a lot,” says author Yoni Appelbaum. “In the 19th century, maybe one out of three Americans moved every year. It was an astonishing festival of mobility.”
Now, Appelbaum says, rising housing prices have outstripped income growth for many Americans who in response are choosing to stay put rather than move to pursue better opportunities, especially to places with even higher housing price tags. Those who stay put, he claims, have grown disenchanted with the status quo – and the nation’s leadership.
Housing Shortages, Higher Prices
Economists broadly agree the shortage of housing is responsible for rising housing prices. Despite best efforts, the problem isn’t abating.
The Congressional Budget Office projects only 1.68 million new housing starts annually in the United States from 2025 to 2029. The National Low Income Housing Coalition estimates the existing shortage of affordable rental units stands at 7.3 million. Oregon Housing and Community Development says despite progress, there is still a need for 128,000 housing units for low-income residents.
Factors affecting new and existing housing prices are well known: Relatively high mortgage rates, lingering inflationary effects, the expense of developing new housing areas, higher-priced lumber and concrete (soon to rise with new tariffs) and labor shortages (exacerbated by deportations of construction workers). Appelbaum, whose new book titled Stuck, underscores another factor: zoning laws and building codes.
“There’s always a reason not to build denser housing,” Appelbaum explained to NPR’s Steve Inskeep. “People worry about parking, they worry about shadows, they worry about the changing nature of the community or its historic character. These are all actual concerns, and they’re legitimate concerns.”
“But if you block almost all new developments,” Appelbaum said, “it gets impossible for Americans to move toward opportunity.” For many people, especially those with low incomes, he says it also means a tenuous grip on the housing they have.
Oregon and Housing Shortage
The Oregon legislature acted in 2019 to expand building options in existing neighborhoods. Cities like Portland responded with policy changes in 2020 that allow middle housing such as duplexes, triplexes, fourplexes and cottage clusters in areas previously zoned for single-family housing.
Appearing on an OPB Think Out Loud broadcast earlier this month, Morgan Tracy, a senior planner for the Portland Bureau of Planning and Sustainability, said the City’s new policy has led to the addition of 1,400 new units with smaller footprints and prices $250,000 to $300,000 below market prices for single-family homes. Tracy said the new units are spread throughout the city with the largest concentrations in inner east side neighborhoods.
The market dynamic at work, Tracy explained, is that builders can construct more square footage with multiple dwelling units. At a price point around $400,000, these units appeal to first-time homebuyers and empty-nest families who want to downsize.
Housing Construction Complications
But as Appelbaum described, there are complications. In his NPR interview, he described one of them:
“Not far from where I live, there’s a metro station with a large parking lot that’s largely unused. And 25 years ago, there was a proposal to build housing on that parking lot. It’s exactly the sort of project that urban planners will tell you they love. You put people living next to mass transit, next to a downtown area. They don’t need to use cars a whole lot, and you can build on vacant land, so you’re not displacing anyone. This project had everything going for it. Twenty-five years later, you can drive by and still see the parking lot.”
Tracy described other complications for infill projects. Land is expensive in urban areas like Portland. Houses with smaller footprints still need kitchens and bathrooms, which raise the cost of construction per square foot. Some multi-family housing sites become available after an existing house is demolished and the lot needs cleared, another added expense.
Governor Kotek and the legislature have made it easier for cities to expand their urban growth boundaries. That poses the challenge for cities to find the money to extend pipelines and roads to serve newly designated housing areas. Depending on the proximity of greenfield sites, utilities, schools and transit providers need to expand their service areas. Those costs, which are typically passed on to developers, can negate some or all of the lower cost of land.
Oregon just launched a $75 million revolving fund, a part of Kotek’s housing plan, that will enable local governments to offer interest-free loans to developers who build moderate and affordable home projects.
The aspiration is for the funding assistance to generate 3,000 new units of affordable housing that rents or sells to people making 120 percent of an area’s median income. That equates to $97,100 for a family of four living in Baker County or $141,600 for the same size family in Multnomah County.
Kotek set a goal of 36,000 new housing units per year over a decade to achieve a better match between supply and demand. Fewer than 18,000 new housing permits were pulled in the state in 2023. Through November of last year, there were only 13,000. The 2025 legislative session is expected to return to the issue of more housing, focusing on more affordable middle housing, rental units and supportive housing.
Denver, Austin Success Stories
Rick Metsger, a former state senator and now a lobbyist, posted a column touting the successful housing efforts in Austin and Denver.
“The Democrat-controlled city councils in Denver and Austin initiated an aggressive pro-development approach to build tens of thousands of new rental units as quickly as possible,” Metsger wrote. “Planning doors were swung wide open, red tape slashed and developers responded. Austin has built tens of thousands of units in the past three years and Denver has added more than 21,000 rental units this past year alone.”
Metsger added, “The result: Austin has seen declining rental rates for 19 consecutive months and rental costs in Denver have dropped almost 6 percent in the last year.”
By comparison, Portland added 1,483 rental units in 2023. The Fall 2024 Apartment Report showed 4,250 rental housing units under construction statewide.
Metsger singled out rent control as a downer for multi-family housing developers, who worry their sizable investments will take too long to pay off. He cited Colorado Governor Jared Polis’ opposition to rent restrictions that he said “would lead to less affordable housing being built and substantially increase housing costs.”
Progressive Policies Can Backfire
Appelbaum dings progressive politicians for “layering on these rules and walling off communities they celebrate for their diversity and openness to allowing new people to move into those communities.” He cited a California study that found for every 10 points better that liberal candidates did in city elections, housing permits in those cities dropped by 30 percent.
Returning to his theme of declining American mobility, Appelbaum said, “We know a lot about what happens when people want to move and they can’t. Psychologists tell us they grow more cynical, more disconnected. Sociologists tell us that they’re less likely to become active members of groups and organizations, less likely to show up in church on Sunday. Economists tell us that their earnings will stagnate – they won’t move into new careers, they’ll have fewer jobs and start fewer businesses. We can see all of these things happening.”
He added, “Americans have watched their country change over the last 50 years. There’s a broad sense in this country that something is broken, that it doesn’t work the way that it used to. The chance to shape your own life, to have agency, to choose where you want to live leads people to feel hopeful about the future, to feel open to the possibility that others’ gains might lift everybody up. People who feel stuck in place conversely tend to see the world as a zero-sum game in which the gains that anyone’s making come at their expense.”
Stuck Reviews
“Americans have always treasured the joys of moving, but Yoni Appelbaum brilliantly shows how that freedom has been strangled by zoning laws, racism and the misuse of building codes. Housing, he writes, ‘has grown artificially scarce and prohibitively expensive.’ Public anger and social divisions have embittered our politics. With verve and passion, Appelbaum champions a nation not only with more affordable housing but also with stronger communities and richer social connections. Stuck should provoke clearer thinking, more productive debate – and action.
– E.J. Dionne Jr., author of Why Americans Hate Politics and Our Divided Political Heart
“At once a fascinating history and a blueprint for change, Stuck unravels a powerful and urgent story about the hidden forces that have shaped – and constrained – American opportunity. With gripping historical insight and sharp contemporary relevance, Yoni Appelbaum delivers a must-read work for anyone passionate about equity and the future of American mobility.”
– Gilbert King, Pulitzer Prize-winning author of Devil in the Grove
