Housing crisis isn't inevitable: New study offers roadmap to lower costs and expand opportunity

Mountain States Policy Center today released a new study, Why Housing is Getting More Expensive—and How States Can Fix It, examining the root causes of the housing affordability crisis and outlining policy reforms that can help make homeownership more attainable.

Authored by Senior Policy Analyst Madilynne Clark, the study finds that decades of underbuilding, restrictive regulations, permitting delays, and limited housing choices have contributed to a housing shortage estimated at 3 to 4 million homes nationwide. In Idaho, Montana, Washington, and Wyoming alone, the shortage exceeds 335,000 homes.

"The housing affordability challenge cannot be solved with a single policy or expensive government intervention," said Clark. "States need to address both sides of the equation by increasing housing supply and creating economic opportunities that help families afford a home."

The report highlights several key findings, including:

• The national ratio of home prices to income reached a record 5.83 in 2022.

• Government regulations account for nearly one-quarter of the cost of a new home.

• Restrictive zoning and minimum lot-size requirements significantly increase housing costs.

• Light-touch density policies, accessory dwelling units, and starter-home developments can expand housing supply without dramatically changing neighborhood character.

• Strong economic growth and entrepreneurship remain critical to improving housing attainability.

  
  

The study recommends a series of market-oriented reforms, including streamlining permitting processes, reducing regulatory barriers, expanding housing options such as duplexes and accessory dwelling units, encouraging starter-home construction, and ensuring fair treatment for innovative housing types such as manufactured homes.

"As states across the country debate housing reform, policymakers should focus on removing barriers that prevent builders from meeting demand," said Clark. "When government gets out of the way and allows housing markets to respond, families have more opportunities to find homes they can afford."

The full report is available here.

About Mountain States Policy Center

Mountain States Policy Center is an independent research organization based in Idaho. The Center develops and promotes public policy solutions that advance free enterprise, individual liberty, and limited government throughout Idaho, Montana, Eastern Washington, and Wyoming.