Tag Archives: affordable housing

Youngkin’s Housing Start

by Adam A. Millsap

U.S. housing prices have risen 10 percent since last September and 41 percent since before the pandemic. Though prices have dipped slightly over the last three months, inflated costs remain a major problem. Policymakers around the country are trying to bring prices down, and a new proposal from Virginia governor Glenn Youngkin follows the right playbook but requires further elaboration.

America’s housing crisis is largely a supply problem. Data show that housing prices fell at an annualized rate of 1 percent in September, the third straight monthly decline. While this may seem like progress, the decline is largely driven by the Federal Reserve’s interest-rate hikes. A higher benchmark interest rate leads to higher mortgage rates, which means monthly payments—another measure of affordability—remain elevated.

To make housing more affordable, policymakers must boost supply relative to demand, while holding everything else, including interest rates, constant. The press release announcing Youngkin’s Make Virginia Home plan acknowledges the supply problem, promising to “promote increasing the supply of attainable, affordable, and accessible housing across the Commonwealth.” That’s a worthy goal; achieving it is another matter.

Research shows that the primary culprits behind high state and local housing costs are restrictive zoning and land-use regulations that artificially limit the housing supply. Youngkin’s plan is short on details, but it explicitly mentions establishing guardrails for local zoning and land-use review processes. The state would impose deadlines to stop local governments from slow-rolling approvals; such delays impose big costs on developers and make otherwise attractive projects financially infeasible. Continue reading