Experts suggest the # 1 way to replenish housing stock

The housing shortage, especially affordable housing, is on many minds, this is a major question for housing policy makers, and is at the center of countless recent studies.

One of these surveys is courtesy of Zillow Research, which published, “Zoning changes the most efficient way to increase housing supply, ”For which the authors took into account the opinion of a panel of more than a hundred experts in the field and economists.

Zillow’s panel expects house prices to continue rising and construction to slow in the coming years, with high costs being the main obstacle. They deduced that relaxing zoning rules to allow for more and / or more efficient new home construction would be the most effective way to increase supply.

On average, the expert panel told Zillow it expects new housing starts to end the year 2.5% below December 2020 levels and drop 2%. additional by the end of 2022.

Zillow researchers address the fact that builders’ confidence has always remained at very high levels since last summer, which makes the prediction a bit inconsistent, however, Zillow points out, “optimism alone may not be enough to make a significant dent in the massive shortfall in construction since the Great Recession. “

Less restrictive zoning was the most effective strategy to help increase inventory; this is the n ° 1 route chosen by 56% of respondents.

Zillow explained this:

Zillow’s previous research has even found a modest amount of overzoning in large metropolitan areas could add 3.3 million homes to the U.S. housing stock, creating room for more than half of missing households since the Great Recession — one of the main reasons for today’s frenzied housing demand. A majority (57%) of owners previously interviewed by Zillow previously said they believed that they and others should be able to add additional homes on their property, and 30% said they would be willing to invest money to create homes on their own property if it was allowed. “

Other recommendations for increasing housing supply included relaxing the land subdivision process, relaxing local review regulations for projects of a certain size, accelerating the adoption of new construction technologies and increased training to strengthen the construction workforce.

The researchers add that, of course, new construction isn’t the only way to increase inventory.

A similar panel, when surveyed in the first quarter of 2021, said they expect the housing stock to start growing again in 2021, with an increase in the number of existing homes listed being the most likely path to inventory growth.

Previous Zillow is looking for has shown that the widespread distribution of coronavirus vaccines could make some 14 million households comfortable moving that don’t necessarily feel that way now.

Terry Loebs, the founder of Pulsenomics, exposes the many situations that come together to create the current environment.

“A profound shift in housing preferences, the adoption of remote employment, low mortgage rates and the economic recovery continue to fuel demand in the single-family home market and push up prices,” Loebs said. “Strict zoning regulations, an acute labor shortage and record material costs are hampering new construction, worsening the imbalance and raising expectations that above-normal house price growth rates will persist in the near future. – beyond the short term. “

The full Zillow Research article is available at Zillow.com/research.