Ezra Klein is right about lagging housing production but his most recent suggestions probably won’t help very much.
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Ezra Klein has done a great service to the housing discourse by providing safe harbor for those on the left to criticize government regulation. I’ve written approvingly of his Abundance Agenda and how it could help improve housing outcomes in the country. In a New York Times Column, though, Klein ends up getting beguiled by a solution that I’ve also written about, modular housing. Unfortunately, unless we dramatically change local zoning laws, eventually eliminating them, we’ll still see housing production lag with modular manufactured solutions falling to the same regime of codes and rules that stymie the production of site-built homes. More production is the answer, but the modes of that production matter less than the nature of housing production itself and the way it is currently regulated.
Klein’s column, America’s Housing Crisis, in One Chart, relies on data from the United States Census Bureau that housing production has lagged since the financial crisis of 2008.
Production of new housing has not caught up to pre 2008 levels in spite of ongoing demand.
Screen Capture by Author.
“America built fewer homes per 100,000 people than it did in 2005, 1995, 1985 or 1975,” Klein points out, and says, “If you wanted to encapsulate the entire problem in a single chart, here it is” posting the chart.
Klein points to an idea that would give everyone in a jurisdiction that hit ambitious housing production targets with a $1,000 check. This, Klein suggests, tries “to solve the hard problem at the heart of housing politics: It’s the people who already have homes who have a voice in local politics and planning. They often like their neighborhood the way it is. They don’t want more traffic or new neighbors or the hassle of nearby construction. What’s in it for them?”
I agree that if the federal government is going to get involved with improving housing policy, it will require building in some very strong connections to federal subsidies. However, I doubt some kind of dividend is going to persuade people who are seeing their housing values rise because of restrictive land use policy. And incentivizing more single-family homeownership simply builds a constituency that will be reliant on the 30-year mortgage, a vehicle that relies on inflation and that means scarcity. If a policy truly and aggressively promoted lots of supply, appreciation rates simply wouldn’t keep up with the interest and most people in those homes would remain underwater for the life of the mortgage.
It would be better to tie production to subsidies not related to housing, like highway funds. This is how we have uniformity in laws about selling alcohol; the federal government tied highway funding to passing legislation raising the drinking age to 21. Every state complied.
One thing that won’t work and hasn’t, is relying on techniques like offsite modular construction. It is true that this kind of production is efficient and produces good pricing off the assembly line, but site constraints and regulation at the local level kill the savings, making modular and manufactured almost as expensive as site-built homes. Klein says “perhaps that’s fanciful” solution. It is. Many different tactics will be needed to slay the zoning monster, but providing alternatives to ownership that don’t rely on long term debt that relies on inflation for appreciation would transform the politics enough to see long term results on production and pricing.
Source: https://www.forbes.com/sites/rogervaldez/2025/12/02/klein-takes-on-lagging-housing-production/
