The Housing Shortage Is a Literal Shortage
Expanding on my USA Today op-ed
This week, I am expanding on my recent USA Today op-ed, which argued that the housing shortage is a literal shortage. I was and am thrilled to bring that message to a large general audience. Establishing the basic fact of the housing shortage feels extra important because, in truth, I questioned it for more than a year after founding YIMBYs of NoVA in late August 2021.
Obviously housing was too expensive, and I believed the shortage narrative enough to repeat it with my conscience intact and build my group’s messaging around it, yet I doubted. The market cleared on a basic level, right? Supply met demand, strictly speaking. Although homelessness was increasing, I reasoned that if a housing shortage truly were the root cause of the affordability crisis, the shortage’s scale would dwarf the number of people without stable housing. I had a feeling homelessness was circumstantial evidence, not a smoking gun. The November 2022 visit to a homeless shelter I write about USA Today (and elsewhere), did help convince me of the shortage:1
A staff member [who gave my friend and I a tour of the shelter] explained that rising rents had increased the local population without stable housing, and that the shelter struggled to find available homes to place its clients in.
The image of a literal shortage of roofs to put over people’s heads was vivid.
I also allude to hearing disturbing stories of people living in overcrowded conditions in my city, Alexandria, Virginia. That was far more recent and easily the most memorable, emotionally salient, and disturbing moment in my time as a housing advocate so far. My blood ran cold and I basically stared into space for an hour. I had some prior awareness, but realizing how common it was hit me like a freight train. I had long wondered, how does the average person without a college degree afford to live in this region, where so many residents have advanced degrees and the median income is about $120,000? The answer is that they super-commute or make the grim choice to live in overcrowded, unsafe, sometimes degrading conditions. Or they cannot afford to live here and are locked out of the DC area’s recession-proof economy.
Quite a few recent immigrants, some undocumented, live in overcrowded housing, but so do regular working people and students. The story is similar to folks renting a room in a gray-market boarding house: seldom discussed yet deceptively common. Though folks living in overcrowded conditions have even less incentive to be open about it, giving their landlords excessive leverage.
The national housing shortage is a broad topic and I wanted to hit 600 words to have a shot at USA Today, so I was careful about the scope of my op-ed. My biggest omission was the “vacancy truther” thesis that there are plenty of unoccupied homes, enough to shelter all American residents without stable housing. Though I am confident that thesis is wrong, I do not have a full command of the evidence against it, from how vacancies are actually calculated, to the condition of vacant homes, to their location (embedded at the bottom is a great video essay on vacancies by my favorite urbanist YouTubers). Major critique or not, it was too messy to broach.
However, I did want to address the widespread belief that investment firms are purchasing many single-family homes (which is true) and artificially raising prices. Many normies I had pitched on YIMBY immediately complained about Wall Street buying up houses, including a nurse who was wheeling me to an X-ray.2 Being an economic and financial story gives it an air of sophistication and direct relevance to housing shortage claims. Most of my graf on that topic was edited out — which I serenely accept as a normal part of op-ed publishing — so I am sharing it in full:
Investment firms have owned many multi-family buildings for decades. They are buying houses because they expect a continued shortage to boost those properties’ values. Invitation Homes, Inc. famously told investors in 2017: “We have selected markets that we believe will experience strong population, household formation and employment growth and exhibit constrained levels of new home construction.” The firm listed “overbuilding” as a risk to its strategy.
In real life, I like to tell folks that hedge funds would not be buying boring single-family homes unless there were something really messed up about the housing market that made them a speculative financial asset. There is a subversive YIMBY argument that these investment firms actually give renters access to high-opportunity neighborhoods where they could not afford to buy a home. I am not sure that is a winning message, but it is funny and seems correct on its face.
I have a similar reaction to investment firms renting out houses on the right side of the tracks and to big property management firms using sophisticated software to maximize the rents they charge: That is what the market will bear. Even if we accept the premise that these practices are abusive, to stamp them out we must lower the prices that the housing markets will bear. Doing so will entail increasing inventory and opening a largely insulated, absurdly overregulated economic sector to stiff competition. It will also take considerable time, leaving plenty of room for consideration of short-term interventions like vouchers and other subsidies.
YIMBYs should work to make beige suburban homes, and apartment buildings for that matter, a less gratuitously profitable investment. It’s time to overbuild.
From the beginnings of our nation, Americans have migrated hundreds of miles for a brighter opportunity. In the past decade or so, lower cost of living, including cheap housing, has become a key driver of internal population flows. “I moved hundreds of miles because here I could afford shelter” is no one's vision of the American dream.
As more people learn how restrictive zoning and other land use regulations cause them and their loved ones profound hardship, housing advocates will continue to turn the tide. I am grateful to Young Voices for the opportunity to publish in USA Today more than a decade after I was an editorial intern there. Read my op-ed about the housing shortage by clicking this link.
Thanks to my 245 subscribers, especially my 5 paid subscribers. If you enjoy this blog or want to work together, please contact lucagattonicelli@substack.com. I would love to write about a topic suggested by a reader. Visit YIMBYs of Northern Virginia, the all-volunteer grassroots pro-housing organization I founded, at yimbysofnova.org.
I wish I had phrased it that way in the USA Today: “helped fully convince me.”
I was fine though the episode helped inspire my warning to fellow YIMBYs about avoiding burnout. Yes it is crazy that I was evangelizing for housing in the ER, not the sort of thing I would do anymore!