Daughter on the father’s shoulders in front of the suburban house
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US housing rates remain close to a high level despite the recent slowdown in demand. The only way to truly make the housing cheaper is to build much more than those in places people want to live. Pew Charitable Trusts recently posted a set four principles* Signed by dozens of housing experts that state and local policymakers must follow to increase housing supply and improve financial accessibility.
Last week, the Fed reduced the interest rate target by 0.25%. Many hope that this move will reduce the interest rates of mortgages that have been about 6.5% from the end of 2022. The highest mortgage rates in recent years, along with higher prices, have increased the total ownership cost at home for the first buyers as well as those looking for upgrading. While lower mortgage rates will help some people, it is not the final cause of America’s economic housing problem. The real driver is a shortage of a house of four to seven million units.
Policy -executives can face this lack by committing them to four principles that will increase the offer and create more affordable housing options.
First, they should allow more housing of all types, including double terms, townhomes and smaller boot houses. Since these houses are smaller, they require less land and materials, which makes them cheaper than the larger houses in larger lots.
Several states have already acted. In 2025, Rhodes Island passed a law that allows Townhomes in more parts of the state. The Texas Act Starter Starter allows new houses in lots as small as 3,000 square feet, or just 0.07 acres. Other states, including Washington and Oregon, have created a rational licensing process to facilitate property owners to subdue many of them to encourage more density.
Policy -executives should also avoid orders that increase costs and encourage spread. Minimum parking is a remarkable example. Many cities require developers to build a minimum number of parking spaces, for example, one point per bedroom for a new apartment building. While these rules may sound good about people who are worried about finding space to park, they have unintentional consequences. The parking lots are expensive for construction – surface lots can cost up to $ 10,000 per space, while the garage parking can cost up to $ 50,000 per space. The requirement of developers to build parking, even for projects near bus lines, underground routes or neighborhoods, increases the cost of construction and therefore prices.
Washington has passed a law that prevents local governments from imposing more than 0.5 parking spaces per unit for apartment buildings and one area per unit for a house. Similarly, New Hampshire passed a law that prevents municipalities from demanding more than one place per house. Some cities, including buffalo, Lexington and Hartford, have completely eliminated parking requirements. These cities show that we do not need government officials who are small in the amount of parking developers.
Policy executives should also facilitate the construction of apartments and co -operations, especially in expensive areas of high demand near businesses, retail and transit lines. Montana, Texas and Colorado have recently passed laws to allow single -season apartment buildings up to six stories high. The buildings of a boat are cheaper for construction and because there is only one staircase they can get a variety of shapes. This flexibility of the floor is vital to cities filling projects where the lots are often irregularly shaped.
This year, Rhodes Island’s policy officials set another major building reform. The state now allows developers to build three and four families under the Code Code and not the most complex commercial building code. Triplexes and Fourplexes are excellent choices for younger families and changes in Rhodes Island’s code will make them easier and cheaper to build.
Finally, policy -makers Must diminish Administrative weights. Developers are charging significant costs that navigate in complex licensing processes and expect licenses to be approved. These expenses are then transferred to home buyers. Policy -executives can take various steps to reduce these expenses.
Arizona allows third -party professionals to approve licenses for houses instead of demanding developers to rely on the limited offer of government reactions. The Grand Canyon state also passed a law that requires municipal governments to create some housing plans for housing, double, triple and adus. Developers who use these pre-empted plans will bypass some of the licensing procedures and the relevant costs.
State and local policymakers should also use taxes and wisdom taxes. Property taxes are funding significant local goods and services such as fire departments, police, courts and parks. Local officials should be transparent about how they spend real estate tax revenue and use any increase in revenue to improve basic services. If the services are already sufficient, employees will have to reduce taxes or refund in taxpayers.
Impact fees are also a useful tool, but local governments should not be abused. Impact fees which are clearly linked to the necessary new infrastructure, such as roads or sewer lines, are an appropriate source of revenue. However, the impact fees that are excessive or require developers to contribute money to unlawful projects, such as a park on the other side of the city, to pass new growth and eventually increase housing prices.
State and local policy -makers have a variety of tools to reduce the cost of housing. The key is not to overcome it. Those in charge of the policymark of some basic principles – that can allow more housing of all types, including apartments. Avoid rigid commands; and lower administrative obstacles – they will reach solutions that increase housing supply and improve financial access.
*I am signatories to the principles of Pew.
