Mortgage News March 21, 2023
Zoning is an issue that many communities struggle with, but officials should consider creative ways to address the affordability crisis that benefits both the residents and municipalities. According to Zillow’s Home Price Expectations Survey, zoning reform was a popular answer to create more opportunities in growing communities to effectively address affordability.
Encouraging local governments to support affordable housing initiatives in zoning in the form of tax credits is also crucial. This helps create an image of opportunity for what some may call “low-income” housing. It’s a common-sense approach that can benefit both the community and the residents.
We need to build more homes according to Dr. Skylar Olsen, Zillow’s Chief Economist. Olsen believes that policies like modest densification will provide opportunities to create more density and help communities remain livable for everyone. Without a significant increase in the number of homes built in the near future, affordability will continue to be a major challenge for many individuals, particularly first-time home buyers.
Affordability is a defining feature of the current real estate market. According to Zillow, an average home costs just under $1,600 per month with a 20% down payment. This number is 46% higher than January 2022 and $754 higher than before the pandemic.
One of the key drivers of unaffordability has been the chronic shortage of new housing construction, which to this day has not recovered from the Great Recession. This results in a 3.79 million-unit gap in home production, according to a study from Up for Growth.
In conclusion, zoning officials should consider creative ways to address the affordability crisis that benefits both the residents and municipalities. Encouraging local governments to support affordable housing initiatives in zoning in the form of tax credits and reforming zoning are some effective ways to address affordability. The chronic shortage of new housing construction needs to be addressed to create a balance in the real estate market, which will benefit everyone in the long run.
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