The National Association of Realtors has called on U.S. policymakers to do more to address the lack of stock in the nation’s housing market, saying that the situation has become “dire” and that “now is the time to act”.
The NAR’s report, Housing Is Critical Infrastructure: Social and Economic Benefits of Building More Housing, highlights both the causes of housing shortages and suggests several potential solutions that could be implemented by local and federal-level policymakers.
The report claims that the U.S. has suffered from a shortfall of between 5.5 million and 6.8 million housing units since 2001.
“There is a strong desire for homeownership across this country, but the lack of supply is preventing too many Americans from achieving that dream,” said NAR Chief Economist Lawrence Yun in a statement. “It’s clear from the findings of this report and from the conditions we’ve observed in the market over the past few years that we’ll need to do something dramatic to close this gap.”
The NAR’s report claims America faces a chronic shortage of affordable and available homes to support its population. One of the main reasons for this shortage is the lack of new construction in the country and prolonged underinvestment, which it said has bento the detriment of the U.S. public and its economy.
“The scale of underbuilding and the existing demand-supply gap is enormous,” the report read. “[It] will require a major national commitment to build more housing of all types.”
As far as fixing the problem goes, the report made several recommendations. First, it calls for lawmakers to remove construction barriers that could help to incentivize new developments. The NAR report also highlighted a suggestion from an earlier study, State and Local Policy Strategies to Advance Housing Affordability, that recommends lawmakers pursue solutions through fiscal policy measures and policies aimed at increasing the supply of housing. It also calls for reform of zoning policies in many U.S. cities.
NAR President Charlie Oppler said in conclusion that a number of factors over the past two decades were responsible for the “massive housing investment gap” seen in the U.S. today. But instead of dwelling on those problems, what’s more important is to act urgently to find solutions to the housing crisis and provide more stability for future markets.
He explained that by increasing housing construction, not only will there be more much-needed inventory. It could also create an estimated 2.8 million jobs and $50 billion worth of new, nationwide tax revenue.
“Additional public funding and policy incentives for construction will very clearly provide huge benefits to our nation’s economy, and our work to close this gap will be particularly impactful for lower-income households, households of color, and millennials,” Oppler said.