A recent report from the Center for Housing Policy shows that more than three million working families in American live in homes severely inadequate for their needs or are forced to spend more than half their income on housing. The report, called "Housing America's Working Families," highlights the fact that this problem is most serious in metro areas like San Francisco, San Jose and Washington, D.C. that have had a boom in job growth in recent years.

"In many high growth markets, teachers, police officers, fire fighters and other public servants are commuting 50 to 100 miles to work each day because they can't find affordable housing to rent or buy close to their jobs," says Robert L. Mitchell, president of the National Association of Home Builders (NAHB). "Growth boundaries, large-lot zoning and resistance to infill development are pushing people to satellite cities in search of homes that are affordable to middle income families."

Forces at work to encourage even tighter restrictions on growth, which may very well be wolves in the sheep's clothing of environmental protection and traffic congestion concerns- are pushing the cost of housing beyond the reach of millions of young families, according to a recent NAHB release.

"When large tracts of land are removed from the inventory of developable land because of restrictions in use or creation of growth boundaries, then the value of all remaining land still available for development increases. That can add thousands and thousands of dollars to the cost of a home," says Mitchell.

What many don't realize is that although there has been a surge in the cost of building materials and skilled labor within the building industry, the cost of developed land has also skyrocketed due to these growth restrictions. For example, the cost of a developed lot in some high-growth markets has increased to as much as 35% of the final sales price today, as compared to 20-25% about 20 years ago.

Job growth and housing demand also figure prominently into this picture. Says Mitchell, "It's a simple equation. More jobs equals more demand for housing." If job growth is a priority, then policy makers have a responsibility to ensure that equal priority is given to demand for a broad mix of housing choices, according to Mitchell. The lack of connection between these two forces is felt most acutely by middle-and-lower-income workers, including public servants and people who work in the service and retail industries, he said.

Census statistics predict that the population of the U.S. will grow by approximately 37 million over the next 15 years, with some 1.3 million new households formed each year. By the same token, 275,000 housing units will be lost each year because of age, neglect, disaster or replacement, and another 225,000 additional homes will be needed for an inventory of vacant units to accommodate household movement (only about 300,000 new homes will come from the mobile home arena).

Developing a master growth and zoning plan that can provide mixed-use and mixed price-ranged home products, along with infrastructure improvements, such as roads and schools, are the only solution that can answer this imminent demand for housing. Extremists in states like California, Arizona, and Colorado are apparently hard at work seeking to impose anti-growth policies, attributing their concerns in vague language referring to traffic congestion and loss of open space. The price tag for these efforts is high. The resulting prejudice and legal wrangling create an open invitation to allow consumers to use lawsuits to stop growth.

According to Mitchell, "Advocates of growth boundaries pay lip service to affordability, but they offer no solutions to the housing crises experienced by low-and-moderate-income families as a result of restrictive growth boundaries." And there is no doubt that housing growth will be a huge political issue in the next administration in Washingtion.

The "Smart Growth" management system espoused by the NAHB is not the same as no growth, says Mitchell. Denying growth and failing to plan will just add fuel to the sprawl-related fires already in existence. Planning housing for future generations and do it judiciously, with the objective to provide a wide range of housing choices and price ranges, is their ultimate goal. Finding ways to control sprawl, yet offer new in-fill housing in America's cities, while cutting through the bureaucratic red tape and prohibitive forces preventing it, will no doubt be the biggest challenge to the homebuilding industry. For more information on Smart Growth, visit the NAHB Web site at www.nahb.com.

Published: October 20, 2000

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A veteran of the real estate and homebuilding industries since 1986, Dena Kouremetis first joined Realty Times as a new homes writer in 1998. Since then, she has authored four books, written consumer columns on new homes issues for websites and newspapers all across the country, contributed to builder trade magazines, appeared as a guest expert on several radio shows and even created a ten-chapter podcast for LendingTree.com’s homebuilder website, iNest.com, now available on iTunes, entitled Uncharted Waters; Navigating the Purchase of a New Production Home. Kouremetis recently joined her local Folsom, CA Coldwell Banker office as a broker associate while continuing to write for the real estate industry. For the past three years, she has been training real estate agents for both the resale and new homes industries, putting her experience, research expertise and gift of expression to work to help others entering the business.