T
he US faces a significant 5.5-million-unit housing shortage, with the largest gap in the middle-income price range, dubbed the "missing middle" by experts. Despite millions of Americans being priced out of homeownership, many affordable housing projects have stalled due to increased regulations and higher costs. Panelists at NAR NXT, The REALTOR Experience, called on real estate professionals to advocate for a greater mix of housing that includes all price points within their communities.
"This isn't a partisan or urban-rural issue; it's an everywhere issue," said Troy Thiel, CEO of the Thiel Team in Madison, Wis. He urged getting more people involved and finding solutions to address the challenge. Panelists suggested various solutions, including incentivizing developers to convert multifamily units into homeownership opportunities, supporting modular housing production, office-to-residential conversions, and flexible zoning laws.
Real estate professionals can play a key role in addressing the shortage by advocating for zoning reforms that allow for more diverse and denser housing types, such as townhomes and accessory dwelling units. They can also push for targeted financial incentives, including tax credits and fee waivers, to support smaller projects. Additionally, they can help educate their communities on the benefits of diverse housing.
In Massachusetts, a significant downturn in affordable housing has led to a surge in home prices over 40% since 2018. The state has identified the need for 200,000 units by 2030 but developers have scrapped plans due to high costs and regulations. In response, the state passed the Affordable Homes Act, which includes initiatives such as office-to-residential conversion tax credits and support for accessory dwelling units.
Addressing the housing shortage is not just a quality-of-life issue but also about improving economic competitiveness. Tamara Small, CEO of NAIOP Massachusetts, said that when the business community gets involved, developers can progress with their plans. She emphasized the importance of forming broad coalitions to tackle the crisis.
