Housing Costs & Causes
What the data actually shows
This page shows what’s objectively true about a public system and how different analytic lenses interpret those same facts. Frames are not endorsements or positions. They are reasoning patterns people use when looking at the same information.
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Housing costs didn’t spike because of one villain. They climbed because supply lagged for decades, incomes stalled for most workers, and local rules throttled new construction in the places where people needed to live.
Nationally, the U.S. is short 3.8 million housing units across price points, according to Freddie Mac—an undersupply driven by decades of underbuilding, rising land costs, and restrictive zoning.[1] Rents have grown faster than wages in most metro areas for more than twenty years.[2] In high-cost regions like the Bay Area, zoning rules limit multifamily housing on 70–80% of residential land, forcing people into long commutes or unstable situations.[3]
New construction hasn’t kept pace with population or household formation. The U.S. built fewer homes in the 2010s than in any decade since the 1960s.[4] Builders also face high input costs: lumber price swings, labor shortages, and financing constraints that make lower-cost homes financially unworkable.[5]
The burden isn’t evenly distributed. Low-income renters spend a median of 52% of income on rent, and nearly 11 million households pay more than half their income for housing.[6] Black and Latino households face higher rent burdens due to historic segregation, income gaps, and exclusionary zoning.[7]
Housing costs rise for predictable system reasons: too little supply, limited access to where jobs are, concentrated poverty, and policies that make housing expensive and slow to build.
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This frame sees the housing crisis as a product of constrained supply and misaligned incentives. When cities restrict density through zoning, height caps, parking mandates, and conditional approval processes, they reduce the number of units that can be built and increase per-unit costs. The market then does what markets do under scarcity: prices climb.
In this view, local governments have held a tight grip on what gets built, where, and how fast—often slowing approvals to a crawl. A single neighborhood meeting can kill a project that would add hundreds of units. Construction costs surge because timelines stretch from months to years. Developers focus on high-margin buildings because lower-cost units can’t clear the financial hurdles created by regulations and delays.
Under this frame, the fix is straightforward: permit more housing, especially near jobs and transit; remove outdated rules that force sprawl or freeze neighborhoods in time; and let supply catch up. Prices fall only when more homes are allowed to exist.
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This frame looks at housing costs through the scaffold of income, segregation, and who has access to stability. Scarcity didn’t fall from the sky—it was built through redlining, exclusionary zoning, and decades of disinvestment in communities of color. Rising prices hit hardest where incomes were already thin, where families were pushed to the edges of metro areas, and where public housing and vouchers haven’t kept pace with need.
In this narrative, the crisis is about who gets to live near opportunity. High-opportunity neighborhoods lock out affordable housing through local land-use processes that privilege existing homeowners. Workers in service, care, and public-sector jobs spend hours commuting because they’re priced out of job centers. Subsidies for lower-income renters reach only about one in four households who qualify.
Under this frame, the fix requires more than permitting. It demands fair access to high-opportunity areas, enough subsidies to close income gaps, anti-displacement protections for renters, and systems that correct the legacy of past exclusion.
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Both frames respond to the same dataset. Both capture something real. One points to supply, speed, and the machinery of land use; the other focuses on income, segregation, and who gets access to opportunity. Neither frame works alone. Housing costs fall only when zoning, financing, income supports, and neighborhood access move in alignment.
Facts don’t pick sides. They show where the system fails—when building is too slow to meet demand, when wages can’t keep up, when families are boxed out of stable neighborhoods. How we interpret the fix depends on the lens we bring to the table.
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[1] Freddie Mac, Housing Supply: A Growing Deficit, 2021. https://www.freddiemac.com/research/insight/20210507-housing-supply
[2] Pew Research Center, “Inflation and wage trends,” 2022. https://www.pewresearch.org
[3] UC Berkeley Terner Center, Residential Land Use in California, 2020. https://ternercenter.berkeley.edu/research-and-policy
[4] Harvard Joint Center for Housing Studies, State of the Nation’s Housing, 2023. https://www.jchs.harvard.edu
[5] National Association of Home Builders, “Rising materials costs and labor shortages,” 2022. https://www.nahb.org
[6] Harvard Joint Center for Housing Studies, The America’s Rental Housing Report, 2023. https://www.jchs.harvard.edu
[7] Urban Institute, Racial Gaps in Housing Costs and Burdens, 2022. https://www.urban.org