Housing supply stagnant despite growing affordability concerns

A worker carries a board at a home construction site Tuesday, June 29, 2021, in Piedmont, Okla. The housing market is in decline, raising fears of a broader recession. (Sue Ogrocki/AP)

Housing supply stagnant despite growing affordability concerns

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(The Center Square) — Policymakers say they hear the warnings about rising prices for renting or buying a home, but little progress has been made to expand the supply of housing.

A report from Up For Growth, a research group focused on housing shortages, argues that Pennsylvania has a 97,000-unit housing deficit — stagnant from its count last year, when the commonwealth was missing 98,000 units.

Using data from 2012-2021, Up For Growth found that the Philadelphia metro area was short by 80,000 units, the Allentown area was short by 14,000 units, and Reading and Lancaster each short by more than 5,000 units each.

Median rents in those areas have gone up by about 3% annually since 2012.

Legislators have given housing shortages more attention in the General Assembly, but attention does not always mean change or improvement.

In May, Senate Republicans held a hearing that focused on local zoning restrictions as a barrier to new housing construction. They also discussed the possibility of “opening up the municipality planning code and, quite frankly, pre-empting some local control,” as Sen. Gene Yaw, R-Williamsport, said, in an attempt to encourage construction.

Likewise, in October, House Democrats discussed more supply as paramount to reverse rising home prices.

“If we don’t continue to increase the inventory at all levels, we’re never going to get to where we need to be,” Rep. Mike Sturla, D-Lancaster, said.

Up For Growth’s report advocated that governments remove regulatory barriers, infrastructure investment in “high-opportunity neighborhoods,” and encourage medium- and higher-density developments.

The group also warned against “not in my backyard” residents, often referred to as NIMBYs, as a barrier to affordable housing.

“Structural barriers, such as single-detached zoning, and artificial barriers have been in place since the 1930s in many places across the nation, and NIMBYism has proven highly effective at ensuring they remain,” the report noted. “According to a 2019 survey of over 800 developers, investment firms, and property managers from across the country, the most common barrier to new building is NIMBY complaints.”

The problem isn’t unique to cities, or to Pennsylvania.

Suburban and rural areas of the commonwealth, partially driven by pandemic-era population shifts, have seen demand increase faster than in cities. Areas like Lycoming County have no affordable housing at all, some experts argue.

At the beginning of 2023, Pennsylvania’s home construction was down 60% compared to its 2004 peak.

“Not a single state is providing enough housing for its citizens,” the report noted. “Policymakers must make the straightforward but difficult choice to prioritize new funding sources that allow for diverse housing types, to invest in construction innovations, and to bolster infrastructure funding despite the risks posed by NIMBY opposition.”

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