The Economic Perspective: “Improving Housing Affordability”

This is Mary Walden with economist MW, welcoming you to the economic perspective.  Today’s program looks at improving housing affordability. Mike, home prices and rents have been rising faster than personal income, thereby creating an affordability problem for many individuals.   Does addressing this problem require more or less public intervention?

 

Mike:  Summary Answer

  • Excellent question, because there have been recommendations for both
  • Some want active use of government power to require builders to construct more affordable units, and for governments to use zoning to accomplish this
  • In contrast, others say government rules are the inhibitor to affordable housing – cite some research showing rules mandating affordable units result in builders constructing more luxury units to compensate
  • Middle ground may be to look at local rules and regulations that may make building low and moderate income housing less profitable
  • Also, examine ways to lower construction costs – new materials, more “factory construction”
  • I’m MW

 

Mary:  And I’m Mary Walden for the Economic Perspective, an NC State Extension program from the Department of Agricultural and Resource Economics