TA complete and utter victoryThat’s what the past few weeks of Democratic politics have felt like for a niche technocratic movement obsessed with increasing the supply of housing. A booming housing market fueled by remote work has pushed high home prices higher on the national political agenda in recent years, and years of advocacy by YIMBY (Yes in my backyard) activists have made politicians familiar with the logic of a housing shortage.
Vice President Kamala Harris understands it as former President Barack Obama declared on the second night of the Democratic National Convention last month: “If we want to make it easier for young people to buy a home, we need to build more homes and repeal some of the outdated laws and regulations that have made it harder for workers in this country to build homes.”
“We will end America’s housing shortage,” Harris declared to cheers during her acceptance speech two days later. Since then, her campaign has doubled down on the issue, launching a “battleground housing offensive” and running dedicated ads.
It is not surprising that Democratic Party officials believe that America’s housing shortage is causing rising home prices. For the past two decades, the need for more housing has been the closest thing to consensus among technocrats and experts. A range of ideological sources, academic studies, think tank reports, real estate industry analyses, and state-level legislation all reach the conclusion that rising home prices and rents are the result of a declining housing supply. What is surprising is the willingness of national Democratic politicians to bring this issue to the forefront. Opinion on this issue is sharply divided among Democratic politicians at the state and local levels.
Last week, housing advocacy groups hosted a “YIMBY Supports Harris” fundraising video call, in which prominent public officials including Colorado Governor Jared Polis, Maryland Governor Wes Moore, San Francisco Mayor London Breed and Hawaii Senator Brian Schatz spoke in support of Harris’ focus on the housing crisis.
But for a movement accustomed to working in local town halls and forging bipartisan deals in state legislatures, this new attention could be disconcerting. Alexander Berger, CEO of Open Philanthropy, an early and current donor to the pro-housing movement, said he’s generally pleased to see national Democrats united on the issue, but he offered one “caveat”: “The most prominent Democrats taking up the issue… could polarize the issue.” In other words, if YIMBYism becomes associated with Harris and other elite Democrats, will Republican state legislators be more likely to oppose pro-housing bills?
As I reported earlier this year, some prominent advocates of the movement were relieved that President Joe Biden’s State of the Union address did not take a hardline stance on housing policy. Similarly, while many housing advocates celebrated on X and other social media platforms during the convention, some feared backlash behind the scenes.
Regulating housing development is typically the responsibility of state and local governments, and while the U.S. government can help finance housing, especially affordable housing, and use federal money to encourage states to adopt better policies, most experts believe the federal government’s intervention in boosting housing construction is limited and that stronger measures are politically impossible.
Those who fear that elite Democrats will polarize the issue have misread the political economy of the housing shortage. High housing prices are being driven by Democratic-led states and cities. If lower-ranking Democrats align with Harris and Obama, elected officials in charge of highly restrictive housing policy in California, New York, and Massachusetts will face enormous pressure to change course. This would benefit the entire country. As people are pushed out of expensive cities like San Francisco and Boston, they move to more affordable housing markets, creating upward pressure on prices there. But there is a big downside to moving to second-choice housing markets. When people can no longer live near the jobs that are best for them, it hampers the entire economy, and productivity, GDP growth, and wages all suffer.
I also think that if Republicans further strengthen their opposition to housing reform, it won’t have much of a real-world impact either way. As president, Donald Trump tried to spread the message that Democrats were “trying to destroy the suburbs” after Senator Cory Booker of New Jersey proposed offering subsidies to jurisdictions that updated their own zoning to make it easier to build affordable housing. But one of the biggest successes of the housing reform push has been the “Montana Miracle,” a set of reforms passed last year by Trump-backed Montana Governor Greg Gianforte.
To be sure, bills that would help in the short term could be defeated, especially in Republican-led state legislatures. But the biggest recent defeat for the pro-housing movement came not from Republicans but from Arizona Governor Katie Hobbs, a Democrat who vetoed an ambitious bipartisan Starter Homes bill, drawing backlash from both progressives and conservatives. Republicans’ commitment to business and economic growth could lead them down a pro-housing path. Even if Trump and Harris split national Republicans against equity-oriented zoning reform, fast-growing Republican states like Texas and Florida are unlikely to staunchly oppose development and growth, the two biggest ingredients of political success.
aTrump was once famousPeople can get tired of winning too much. Movements used to operating in the shadows often stumble when the time comes. Strategies optimized for persuading lawmakers in conferences can falter under the scrutiny of a national campaign. The most common problem is that winning the battle of ideas online or in the ivory tower doesn’t necessarily translate into progress in results.
Democrats are generally accustomed to demand-side policies — subsidizing existing goods and services so people can buy them — but the housing crisis is fundamentally a supply-side problem. By linking housing unaffordability to a housing shortage, Harris is refuting arguments that many lower-ranking Democrats find persuasive: that there is no housing shortage, that new construction is not the solution, and that redistributing existing housing will be enough.
Harris isn’t shying away from demand-side strategies. One of her most touted housing policies is to provide $25,000 in down payment assistance to all eligible first-time home buyers (eligibility criteria have yet to be detailed). Such programs are popular and seem promising on the surface, but significantly expanding demand-side programs in supply-constrained markets will drive up prices. One study of low-income housing markets found that generous housing vouchers allow landlords to charge higher rents. Another study found that rents grow faster in areas with larger demand subsidies. To prevent down payment assistance from being absorbed by property owners through rising home prices, demand subsidies need to be put into place after a large amount of new housing has been built. A senior campaign adviser, who spoke on the condition of anonymity to speak freely about internal policy deliberations, told me that this is an issue the campaign understands well.
Either way, the biggest obstacle facing the pro-housing movement is that many legislative victories have not translated into significant housing construction. It takes a long time for the housing market to adapt to legal changes. Many major reforms have been passed in the past few years. But it will take time, as well as continued political effort, to redirect local governments toward building rather than slowing development. In 1982, California state law legalized accessory dwelling units (ADUs) that homeowners build on their own land. Accessory dwelling units are small secondary units also known as casitas, in-law homes, or garage apartments.
But the law also allowed stubborn local governments to set standards that made ADU construction cost-prohibitive. As a report from the housing advocacy group California YIMBY explains, “In practice, most local governments adopted burdensome and unenforceable standards that resulted in very few ADUs being allowed for 34 years. In some cities where housing is concentrated on 5,000-square-foot lots, researchers found that ADUs were only allowed on lots over 7,500 square feet.”
Lawmakers tried further reforms, but to little avail. Finally, in 2016 and 2017, a series of new laws went into effect to encourage cities to allow more ADUs. The state ultimately prevailed, with 68,000 new ADUs built between 2017 and 2021. And by 2022, nearly one in five homes built in California will be an ADU.
These tweaks are necessary to figure out exactly what the obstacles to construction are. But it would be even better if cities themselves felt motivated to be partners in building more housing, rather than obstacles. That’s what makes national Democrats’ bold new stance on housing policy so exciting. It would be time-consuming and expensive to ask housing advocates to enforce the law in every Democratic-leaning state government. It would be much more effective to convince them that their partisan and ideological commitments require them to figure out how to build more housing.