I'd argue yes. We should be building housing for working class / middle-class residents (sometimes called "missing-middle" housing, although developers often abuse that term to include luxury units) That's where demand is greatest while still having reasonable budgets and modest-but-workable profit margins for developers involved.
> Is anything getting in the way?
Yes, developers. (Occasionally zoning/historical associations/local laws in places like San Francisco or NYC. But primarily, it's developers)
Instead of building where demand is greatest, developers build only where profit is greatest -- almost every developer focuses solely on ultra-luxury housing (with ultra high profit margins) or low-income housing (where margins are reasonably good due to government subsidy).
If there was new working-class housing construction, their old units would filter down to low income households, because there's enough middle-class people for that impact to be felt in a market. But the margins there are lowest, so no company chooses to do that.
Instead, property developers focus soly on high end. Technically, those filter down eventually too, but by definition, there will never be enough high-income people for those properties to filter down to middle class folks in amount meaningful enough to help the market (so in turn, their properties can't filter down to low income households)
This breaks the entire market. High-end construction costs soars (because they want it and can afford anything). Middle-class properties become psuedo-high-end (for no other reason than lack of middle-class product) which creates this weird distinction between rich middle-class people who bought before the bubble, and poor middle-class people who have healthy wages, but burn 50+% of their income on rents (and so are effectively poor, even though they are on-paper upper-middle-class), and now you have an ever-growing group of "low-income" people who can't afford anything.
If we prioritized middle-class working-class housing, we could get units going without major government subsidy, and the old housing could become affordable to low-income folks (also without subsidy). But that would require companies to not prioritize profit over everything else, so it won't happen.
I think the problem is you are giving a money on the table explanation for the missing lower-income housing. If developers could make more profitable lower-income housing (and by lower I mean anything other than high-end) they would and a lack of such housing is probably caused by a lack of demand(not in the sense that poor people don't want housing but rather they can't raise the price sufficiently to make it profitable for a developer).
I would rather argue that government regulation is definitely the problem on multiple levels. For one you probably have to deal with state and federal regulations making it very difficult to get economies of scale. Does every state/city really need to define the bare-minimum requirements for a house differently? Is there really nothing they can agree on so we can have standardized housing rules? That alone should limit housing costs significantly but if you also limit the power of local government to restrict growth and force it to accommodate new citizens rather than try to block them would also be a very good way to reduce a lot of the costs of new housing. I wonder how much developer money is spent litigating in places like New York and San Francisco that should be seeing most of the growth in housing.
Notice that this is not a problem
In most of the US. Most housing in the US is still probably cheap it's just nobody wants to live in the middle of nowhere. Housing is very expensive in a few critically important areas that have largely failed to accommodate the influx of immigrants.
There are some developers that do. They're mainly outside cities, building out townhouse style multi home communities. From what I've seen the build quality for all of them is universally terrible. They can't splurge like a high end condo but they have to make it look "not poor", so they end up with the worst combo. Cheap and low quality.
> Yes, developers. (Occasionally zoning/historical associations/local laws in places like San Francisco or NYC. But primarily, it's developers)
No, it’s primarily zoning.[0][1] To neglect the vast middle of the market is economic insanity. If some developers build only luxury housing, then they’re leaving money on the table; some other developer will build and sell. When Domenico Crolla can sell a pizza for $4,000, that doesn’t mean Pizza Hut stops selling $15 pizzas. In a well-regulated market, somebody will fund and build middle-class housing.
The problem is that luxury car-oriented regulation has made practical housing near jobs impossible to build.[2][3][4] Occasionally, hyper-local objections to affordable housing.[5] But primarily, it is misguided regulation.
I'd argue yes. We should be building housing for working class / middle-class residents (sometimes called "missing-middle" housing, although developers often abuse that term to include luxury units) That's where demand is greatest while still having reasonable budgets and modest-but-workable profit margins for developers involved.
> Is anything getting in the way?
Yes, developers. (Occasionally zoning/historical associations/local laws in places like San Francisco or NYC. But primarily, it's developers)
Instead of building where demand is greatest, developers build only where profit is greatest -- almost every developer focuses solely on ultra-luxury housing (with ultra high profit margins) or low-income housing (where margins are reasonably good due to government subsidy).
If there was new working-class housing construction, their old units would filter down to low income households, because there's enough middle-class people for that impact to be felt in a market. But the margins there are lowest, so no company chooses to do that.
Instead, property developers focus soly on high end. Technically, those filter down eventually too, but by definition, there will never be enough high-income people for those properties to filter down to middle class folks in amount meaningful enough to help the market (so in turn, their properties can't filter down to low income households)
This breaks the entire market. High-end construction costs soars (because they want it and can afford anything). Middle-class properties become psuedo-high-end (for no other reason than lack of middle-class product) which creates this weird distinction between rich middle-class people who bought before the bubble, and poor middle-class people who have healthy wages, but burn 50+% of their income on rents (and so are effectively poor, even though they are on-paper upper-middle-class), and now you have an ever-growing group of "low-income" people who can't afford anything.
If we prioritized middle-class working-class housing, we could get units going without major government subsidy, and the old housing could become affordable to low-income folks (also without subsidy). But that would require companies to not prioritize profit over everything else, so it won't happen.