Housing construction in a neighborhood in Elk Grove on July 8, 2022. Photo by Rahul Lal, CalMatters
- “The thing that I think we learned is that federal housing policy is stuck in a really weak equilibrium.” – Jared Bernstein
- “The core of the problem is simple: Too much money chasing too few homes.” – Ezra Klein
- “One reason we don’t build enough affordable housing is we’ve made affordable housing unaffordable to build.” – Ezra Klein
New York— New York Times columnist Ezra Klein is warning that America’s housing problems are not just about high prices but about a deep structural shortage that decades of federal and local policy have failed to fix.
In a Nov. 23 opinion piece titled “America’s Housing Crisis, in One Chart,” Klein argues that the United States has allowed a housing deficit to build for generations while productivity in construction has stagnated and political incentives have favored people who already own homes.
Klein opens with a set of stark indicators. He notes that home prices have risen more than 50 percent since the pandemic and that about a third of American households now spend more than 30 percent of their income on housing. He adds that “in 2014, the median age of a first-time home buyer was 31. In 2025, it was 40 — the highest on record.”
For Klein, the basic diagnosis is straightforward. “The core of the problem is simple: Too much money chasing too few homes,” he writes, citing estimates that the U.S. is short between 2 million and 5 million homes after decades of underbuilding. He points out that in 2025, America built fewer homes per 100,000 people than it did in 2005, 1995, 1985 or 1975.
New York Times Chart
Klein argues that presidents from both parties have recognized the problem but have not meaningfully shifted outcomes. He writes that every White House since Barack Obama has acknowledged the need to build more homes, but that the results have been “anemic” under both Democrats and Republicans.
He notes that even when then–Vice President Kamala Harris promised to build three million new homes, housing experts he spoke with did not believe her plan could come close to hitting that target.
A key voice in the column is Jared Bernstein, who led President Joe Biden’s Council of Economic Advisers and is now a senior fellow at the Center for American Progress.
“The thing that I think we learned is that federal housing policy is stuck in a really weak equilibrium,” Bernstein told Klein. “There is just far too little asked of cities and states. They won’t do much to push back on the barriers that are blocking affordable housing.”
Bernstein is one of the authors of a new housing plan from the Center for American Progress that Klein highlights as an attempt to match the scale of the problem.
At the heart of that plan is a proposal called “Rent Relief for Reform.” Under the idea, places with housing shortages would face a choice: build more housing and receive federal support that could give renters in that city up to $1,000 off their rent, or refuse to build and lose access to certain federal grants.
Klein pairs that concept with a similar proposal from the Searchlight Institute, a new Democratic think tank. In that model, cities and other jurisdictions that hit ambitious housing targets would qualify for a federal rebate that would give every household — both homeowners and renters — a check equal to the average increase in rent over the last year.
In both cases, the federal government would be tying tangible, short-term financial rewards to local decisions to allow more housing.
Those designs, Klein writes, are meant to grapple with the political reality that local housing policy is dominated by people who already own their homes and often fear change.
He quotes Jenny Schuetz, who leads housing policy at Arnold Ventures, on how these incentives might change who shows up.
“You can put this kind of crassly as you’re incentivizing renters to show up at local elections and push their elected officials to do things that are renter-friendly, which I don’t hate as a strategy,” she told him.
Schuetz added that “if most renters showed up in the primaries and demanded that their mayor and City Council actually do good things, we could have some pretty different outcomes. But mostly renters don’t show up — particularly in the primary — and so you get these homeowner-dominated coalitions in cities that make it hard to build.”
Klein notes that even when governments adopt policies that expand housing supply, the politics are difficult because the benefits arrive slowly. It takes years to plan, approve and build new homes, and more time for the new supply to meaningfully soften prices.
Aaron Shroyer, who served as special assistant to Biden for housing policy and co-authored the Searchlight plan, told Klein, “If you’re a politician and you have a four-year term, you really need to do all of your housing stuff in year one if you want to have people feel the benefit within that single term.”
Polling highlighted by Searchlight and cited by Klein underscores the political challenge.
Large majorities of Americans say housing costs are too high and that it has become harder to find housing they can afford, but only a small minority believe that building more housing in their own communities would actually lower costs.
Klein argues that this gap between public perception and economic reality pushes policymakers to design tools that turn the long-run, indirect benefits of growth into visible, immediate gains for local residents.
Beyond politics, Klein devotes a substantial part of his piece to how the nation builds housing.
He contrasts construction with manufacturing, noting that between 1950 and 2020 productivity in manufacturing — how much can be produced with the same number of workers — rose by more than 900 percent, helping make many goods cheaper over time. By comparison, construction productivity has fallen over that same period.
Klein turns again to Bernstein to make the point vivid. “If you go back to 1910, somebody showed up with a toolbox and a hammer to build a house,” Bernstein told him. “And if you go to 2025, it’s the same damn thing. This is the one sector where productivity has been literally falling for five decades while everything else has been going up.”
Klein argues that one promising alternative is to treat housing more like manufacturing by embracing modular and factory-built construction. He notes that the United States actually helped pioneer this technology when George Romney, Mitt Romney’s father, served as secretary of housing and urban development during the Nixon administration. But he writes that the country “never figured out the rules nor the financing to make an industry out of it,” while other countries moved ahead.
In Sweden, Klein notes, more than 40 percent of new homes — and more than 80 percent of single-family homes — are now fabricated off-site in factories and then assembled on-site.
The Center for American Progress plan he describes calls for major federal investment in research and innovation in housing construction, using federal purchasing power — including possibilities like upgrading military base housing — to create stable demand for modular builders, and modernizing building codes, insurance rules and financing so modular projects qualify more easily.
Klein also points to the ways publicly subsidized “affordable” housing in the United States has become extremely expensive to produce. He cites a RAND study showing that, in California, affordable housing cost more than one and a half times as much per square foot to build as market-rate housing.
He also cites a Washington Post investigation into a subsidized development in Washington, D.C., where affordable units cost about $800,000 each to build, even as the same developer was building market-rate units next door for $350,000. “One reason we don’t build enough affordable housing is we’ve made affordable housing unaffordable to build,” Klein writes.
As a potential test case, Klein looks to New York City and Mayor-elect Zohran Mamdani’s housing plan.
“New York was once a beacon of creative, public sector-led, affordable housing production,” the plan says. “But decades of disinvestment and shrinking government capacity have left us waiting on the real estate industry to solve a housing crisis from which they profit.”
Mamdani has proposed investing $100 billion to build 200,000 “publicly subsidized, permanently affordable, union-built, rent-stabilized homes” over the next decade.
Klein asks whether New York could become a leader in modular construction by ordering large volumes of public housing from unionized factories, bringing down per-unit costs and speeding up delivery.
He sketches the math of what would happen if modular techniques could bring down unit costs from $500,000 to something closer to $350,000, allowing far more homes to be built for the same money.
Klein acknowledges that some of these ideas may sound ambitious or even unrealistic. “Perhaps that’s fanciful,” he writes. “But our thinking on housing — both public and private — has been far too small for far too long.”
He closes by arguing that the country cannot simply focus on allowing more units under existing systems and methods.
“At this point, making it possible to build more housing just isn’t enough. We need to change how we build housing. I don’t know if modular housing is really the answer. But it’s worth trying.”
Follow the Vanguard on Social Media – X, Instagram and Facebook. Subscribe the Vanguard News letters. To make a tax-deductible donation, please visit davisvanguard.org/donate or give directly through ActBlue. Your support will ensure that the vital work of the Vanguard continues.
Categories:
Breaking News Housing State of California
Tags:
Affordable Housing Ezra Klein federal housing policy Housing Crisis modular construction New York Times