U.S. Housing Stock Grows Slowly

A research brief by Jenny Schuetz and Cecile Murray of the Brookings Institution, “Unpacking the ‘housing shortage’ puzzle: How does housing enter and exit supply?,” shows that net additions to the U.S. housing stock have slowed over time. Additions slowed significantly from a rate of approximately 5% between 1985 and 1987 to less than 2% between 2011 and 2013. Among the four census regions, the South and West had the highest net increases, while the Northeast had the lowest net increase.

Nationwide, 70% of additions to the housing stock between 1985 and 2013 came from new construction, with the remainder coming from reconfiguration of existing buildings, restoration of previously damaged structures, and conversion of non-residential structures. In central cities, about 25% of new additions came from reconfiguration of existing buildings, compared to less than 10% in suburbs.

The three most common ways homes were lost from the stock were demolitions, reconfiguration of buildings to include fewer units, and the relocation of mobile homes. The other sources of loss were damaged homes being taken off the market and conversion of housing into non-residential uses. Central cities were more likely to lose housing through damage than suburbs and nonmetropolitan areas, and nonmetropolitan areas were more likely to lose mobile homes.

The authors urge policymakers to pursue policies that accommodate more housing production to help reduce housing costs. Many local governments still have zoning that prioritizes low-density, single-family housing rather than higher density housing. The article recommends municipalities update their zoning laws, building codes, and property taxes to incentivize the development of high-density housing near employment and transportation centers.

“Unpacking the “housing shortage” puzzle: How does housing enter and exit supply?” is available at: https://brook.gs/2w84RIS