MReport July 2021

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50 | M REPORT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA Overcoming Housing's Acute Inventory Shortage The latest research shows it will "require a major national commitment to build more housing of all types." T he shortage of housing— of both the affordable and merely available va- riety—is a forefront issue for housing-policy decision-makers and is at the center of many recent studies aiming to gain understand- ing and access solutions. The idea of housing as infrastructure has been the topic of nationally recognized op-eds, and it also is at the heart of a recently published National Association of Realtors (NAR) report authored by the Rosen Consulting Group, "Hous- ing is Critical Infrastructure: Social and Economic Benefits of Building More Housing." The authors say that, while the supply lack has been a problem in the making for decades—due to underinvestment and underbuild- ing—it is worse than the experts had surmised and solving it will require a nationwide commit- ment. "The state of America's hous- ing stock … is dire, with a chronic shortage of affordable and available homes [needed to support] the nation's population," the report asserts. "A severe lack of new construction and prolonged under- investment [have led] to an acute shortage of available housing… to the detriment of the health of the public and the economy. The scale of underbuilding and the existing demand-supply gap is enormous… and will require a major national commitment to build more hous- ing of all types." The ability to correct the dearth of inventory has slowed significantly since the turn of the century and more so over the past decade. This trend affects every region of the country, creat- ing what the NAR report calls an "underbuilding gap" of 5.5 to 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 Lawrence Yun, NAR's Chief Economist. "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 some- thing dramatic to close this gap." The report goes into more specifics, but some of the recom- mendations include lawmakers working to expand access to resources, remove barriers to and incentivize new development, and make housing construction an integral part of a national infra- structure strategy. Two well-informed housing and finance experts—respectively, the Urban Institute's Jim Parrot and Economist Mark Zandi—called Joe Biden's Jobs Plan the "most significant housing policy effort in a generation," but, they say, it needs Congress' support. Another Urban Institute report showed a larger focus on making homeownership attainable, as opposed to focusing policy on affordable renting, is the path toward filling that gap. NAR President Charlie Oppler, commenting on his association's report, says that while many fac- tors over the past 20 years have contributed to the issue, "what's important now is that we find so- lutions that will get us out of this crisis and provide more stability in future markets." He suggests adequate increases in housing construction this decade would add an estimated 2.8 million American jobs and $50 billion in 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 particu- larly impactful for lower-income households, households of color, and millennials."

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