The Pew Charitable Trusts’ housing policy initiative works to help policymakers reimagine their approach to housing by illuminating how regulations and statutes drive the housing shortage and rising costs. Strict zoning and land-use regulations have limited the availability of homes, especially lower-cost options such as apartments and townhouses, which could otherwise help meet the nation’s housing demand. At the same time, outdated financial regulations have prevented millions of creditworthy homebuyers—especially Black, Hispanic, and Indigenous people, and those in rural communities—from obtaining a mortgage to finance a low-cost home, pushing many borrowers into riskier and more costly alternative financing arrangements.
Pew studies the ways that policymakers can increase housing availability and safe home financing by revising land-use regulations that have reduced housing supply and increased costs, improve access to small mortgages—those under $150,000—and make non-mortgage financing arrangements safer for homebuyers.
High housing costs continue to be a major concern among Americans, and in the coming months, state lawmakers can build on bipartisan approaches taken last year to ease the nation’s housing shortage, a key driver of soaring rents and home prices.
The United States has a shortage of 4 million to 7 million homes and, at the same time, an all-time-high office vacancy rate of 20%, meaning that more than a billion square feet of office space is unused. But despite the urgent need for housing—and many local policymakers’ desire to convert underused office space to apartments to help revitalize downtowns that lost residents and businesses during the pandemic—construction costs remain too high to make most such conversions profitable, even with today’s high market rents in many U.S. cities and towns.
Manufactured housing—the modern version of a mobile home—is an important, but underused, form of low-cost housing. Today, about 18 million people live in these homes, and most own rather than rent. When borrowing to buy a manufactured home, buyers usually use financing from traditional lenders such as banks or credit unions in the form of mortgages, which finance the house and land together, or home-only loans—also known as chattel or personal property loans—which finance only the house and not the land beneath.
Americans living in rural areas often struggle to get a mortgage, which limits their ability to attain homeownership. One key reason is the limited availability of small mortgages, those under $150,000, which hits particularly hard in rural communities. But potential buyers in these areas also face several distinct barriers to financing that prevent them from using mortgages at the same rates as their urban counterparts.
A new analysis of rent prices and homelessness in American cities demonstrates the strong connection between the two: homelessness is high in urban areas where rents are high, and homelessness rises when rents rise.
