Building Housing in a Hurry

Among regions of the United States, the South is building housing fastest (Photo via Getty Images)

A recent report from Realtor.com found that America made notable progress in building enough homes in 2024 to meet pent-up demand and new household formations, but that the nation’s housing market is still 4 million homes short of addressing its supply gap. The report found that, at the current pace of housing production, it will take the nation’s homebuilders 7.5 years to close the gap.

But different parts of the nation are moving at different speeds in addressing the housing shortage. The report found that the northeastern part of the country is making no progress on closing the housing gap, the Midwest is on pace to close its gap in four decades, the West could do it in just over six. But, by a wide margin, the South is leading the nation. At the current pace of production, it’ll take that region just three years to close the gap.

The report was discussed at a Monday SXSW panel, Unlocking Supply: Addressing the Missing 4 Million Homes. There, Mayor Kirk Watson said Austin is on the vanguard of addressing the nation’s housing shortage thanks to some of the reforms he helped usher through City Hall over the past two years – including zoning changes that allow three houses on one lot, smaller lot sizes for single-family homes, and the elimination of parking minimums.

“We were facing a problem of creating intergenerational unfairness,” Watson said of how he perceived the housing shortage to be affecting Austin’s future. He said an attitude of “I got mine, now you get yours” pervaded policies governing growth in the city, particularly among people who could afford to buy a home in Austin throughout the prior 50 years. But that attitude has made it harder for younger people – who can contribute new ideas – to live in the city.

“People want to move here,” Watson said, “But if we don't have the housing supply, they will go elsewhere, or they won't come here in the first place.”

Mary Cunningham, another panelist who conducts housing research for the Urban Institute, emphasized that the housing supply issues Austin has faced over the past several decades are common to other cities. That’s because cities often “make it too hard to build” housing. “Across the country it is too hard to build,” Cunningham said. “It takes too long, [and] it costs too much.” It’s why the panelists agreed that many of the reforms Austin has recently enacted could help address the housing shortage locally.

But, the panel warned that President Donald Trump’s administration could hamper that progress. Some of the policies proposed by the White House offer a “mixed bag” on housing, Realtor.com’s Danielle Hale said. Immigrants account for about one-third of the construction industry’s workforce; a federal immigration approach that prioritizes mass deportations could severely weaken the ability for communities to actually build housing, Hale said. Tariffs on Mexico and Canada, which provide housing materials like lumber and drywall, could also raise the cost of housing construction, Hale said, which could limit supply increases.

“There are a lot of uncertainties about what's ahead,” Hale said, “and when you have an uncertain future, people tend to retrench. And that's not what we want to see right now.”

Watson outlined his own concerns about how the federal government under Trump could slow progress on housing. An “anti-transit” stance from the White House could harm federal funding for Project Connect, Austin’s once-in-a-generation light rail project that local officials hope will help Austinites save money by living in the city without a car. And “hollowing out” of agencies like the U.S. Department of Housing and Urban Development will mean fewer resources – both in terms of staff support and funding – to help cities meet housing goals.

Federal funding is necessary to build deeply affordable housing, Watson said. “We can’t put it all on local communities.”

Photo via Getty Images

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