Panel, Conference Presentation
Strategies for Expanding Affordable Housing | Global Conference 2025
Milken InstituteJennifer Sondag, Stephen J. Cloobeck, Scott Epstein, Martin Muoto, Shane Phillips, Stephanie Rawlings-Blake
- The housing supply deficit is projected to persist and expand beyond major metropolitan hubs for the next ten to 15 years, with the nation currently over 5 million homes short of needs and the gap expected to remain without removing bureaucratic barriers at city, county, and state levels.
- Current development is characterized as "extremely costly" and "extremely risky" due to discretionary permitting processes, environmental lawsuits, and building codes requiring features like double stairways, which experts estimate have made the regulatory environment a thousand times more difficult than in the 1980s or 1990s.
- California is described as being "regulated out" with over 380,000 regulations, creating a specific plan to pause the California Environmental Quality Act (CEQA) and the Species and Wildlife Act upon the election of new leadership to facilitate growth.
- Predictions indicate that if zoning and density laws are not reformed, the status quo will continue to prevent supply increases, though cities like Austin and Cambridge, Massachusetts, are cited as models where upzoning to four to six-story standards has successfully increased supply and reduced prices.
- A long-term movement building strategy is deemed necessary for zoning reform, requiring a decade-long educational effort similar to Auckland, New Zealand, starting around 2005 or 2007, to achieve significant policy changes.
- Future housing solutions rely on institutionalizing capital flows into the affordable sector, with warnings that nonprofits building homes at $700,000 to $900,000 per unit is unsustainable and that private sector coalition-building is critical for major events like the 2026 World Cup, 2027 Super Bowl, and 2028 Olympics.
- Risk factors include potential economic instability from tariffs described as an "act of war" that could seize bond markets, political uncertainty arising from leadership styles creating business instability, and a lack of federal respect for cities hindering positive working relationships.
- Expected positive developments include a potential pro-housing agenda from the current administration focused on "Opportunity Zone 2" expected to be completed soon, and the expectation that opening single-family neighborhoods to multifamily development will improve equity and reduce carbon emissions from commuting.
- Strategic recommendations emphasize that investors must adopt a long-term perspective to withstand volatility, as "tough times don't last," and that policy shifts require focusing on positive community outcomes like parks and families rather than solely avoiding negative results.