For decades throughout the 20th century, the political conversation surrounding housing occupied a marginal place in American life. Local officials debated zoning ordinances, planning commissions reviewed development proposals and neighborhood groups argued over apartment buildings and parking requirements. 

Local disputes could become intensely emotional for the people involved, but they rarely commanded national attention. Housing was understood to be important, yet not central to the national debate. The issues that dominated national politics were elsewhere: taxes, health care, immigration, crime, education and the seemingly endless cultural conflicts that came to define much of the past few decades.

That assumption is no longer valid.

In California, where voters are preparing to choose a new governor, concerns about home prices and the cost of living dominate the political debate. In New York City, Mayor Zohran Mamdani, elected on a progressive platform focused on affordability, has found himself confronting a reality that has frustrated generations of politicians before him: There is not enough housing in the city, and much of it is unaffordable to large segments of the population. 

Across the country, in places as politically and culturally different as Austin, Minneapolis, Phoenix, and Billings, Montana, policymakers have begun asking versions of the same question. Why has housing become so expensive, and what would it take to make it affordable again?

Solving the problem has bedeviled many cities and towns.

Housing is often viewed as a discrete policy problem, one issue among many competing for public attention. It affects where businesses invest, where workers relocate and whether young adults can imagine building a future in the communities where they grew up. When housing becomes scarce, the effects ripple outward through labor markets, school systems, health care staffing, transportation networks and even patterns of family formation. The politics emerging around affordability reflect that reality.

For much of the postwar period, the United States benefited from rapid housing construction, expanding suburbs and abundant land development. Between the 1950s and the 1970s, metropolitan regions routinely added housing at a pace that accommodated both population growth and rising incomes. Homeownership expanded dramatically — in 1940 it was around 44%, but rose to 60% within two decades, according to Census data. It peaked at nearly 70% in 2005, fell back to about 63% in the wake of the Great Financial Crisis, and has since bumped up a couple of percentage points.

The system was never perfect. Many communities excluded minorities through both formal and informal means, and suburban expansion carried significant environmental and social costs. Yet the broader economic reality remained: in many parts of the country, housing production roughly kept pace with demand.

Beginning in the 1970s, many local governments adopted increasingly restrictive approaches to development. New environmental reviews, historic preservation rules, parking mandates, zoning restrictions and approval processes emerged. Individually, many of these decisions appeared reasonable. Collectively, they made housing significantly more difficult to build.

The consequences accumulated gradually. Few voters noticed when one project was delayed or another was canceled. Yet over decades, the gap between housing demand and housing supply widened. The result was a paradox that now defines much of modern America. The regions offering the highest wages and strongest economic growth often became the least affordable places to live. (The Great Financial Crisis of 2007-08 exacerbated the shortage as construction starts fell off dramatically, from 2 million in 2005 to 600,000 in 2011.)

California, home to some of the world's most innovative companies and productive industries,  illustrates the critical shortage most dramatically. Its economy is the fifth largest in the world, yet many of its residents experience prosperity as something happening around them that they have missed out on. Homeownership rates lag behind national averages. Long commutes are common. Young families leave for other states. Homelessness remains stubbornly visible despite enormous public spending.

These frustrations increasingly shape the state's political culture. The debate is no longer merely whether California generates opportunity. It is whether ordinary residents can access it.

New York confronts a related challenge. For generations, the city has attracted ambitious people from around the world, drawn by its concentration of jobs, institutions and cultural life. But success has carried costs. Demand for housing has consistently outpaced supply, producing some of the highest rents in the country.

This helps explain the evolution of Mayor Mamdani's housing agenda. While political debates often frame housing through ideological categories — public versus private, regulation versus deregulation — the practical challenge facing city leaders is more fundamental. New York needs more housing than it currently has. It needs a solution. 

The same realization has begun to reshape discussions elsewhere.

Austin, Texas, offers a successful model. During the past several years, developers added tens of thousands of apartments to meet rapid population growth. The construction boom transformed large portions of the city, generating criticism from residents who lament the changes to the city’s character. 

Yet, as new supply entered the market, rents softened and in some areas, they declined. Austin has become more affordable.

This recognition is spreading beyond traditionally liberal cities. Montana has enacted reforms aimed at reducing barriers to construction. Arizona continues to accommodate growth at a scale that many coastal regions would find difficult to imagine. 

Policymakers who share little else politically have begun converging around the belief that chronic housing shortages undermine economic opportunity.

For decades, the American debate centered on taxation, public spending and social programs. Increasingly, the conversation is about growth and how to foster it. Housing is part of that conversation, but so are infrastructure, energy production, transportation networks and permitting systems.

The question cuts across traditional ideological lines. Progressives concerned about affordability often find themselves advocating policies that increase private development. Conservatives skeptical of government regulation criticize local restrictions that limit construction. 

Meanwhile, demographic pressures mount. Younger Americans face housing markets that look fundamentally different from those encountered by previous generations. In many metropolitan areas, the path from renting to homeownership has become substantially longer and more uncertain. 

Voters still care about the cultural and ideological disputes that have dominated recent elections. But concerns about affordability are creeping in. Voters who disagree about many things often share a common frustration with housing costs, childcare expenses, health care bills and the broader challenge of maintaining a middle-class standard of living.

The California governor's race and New York's housing debates are not isolated stories, but  indicators of a larger transformation. They reflect a political environment in which voters judge leaders not simply by the values they express, but by the results they get.

Housing has become the clearest measure of that performance. It reveals whether a region can accommodate growth, whether opportunity remains accessible and whether prosperity is being shared broadly enough to sustain public confidence.

The politicians who define the next decade may not be those who speak most effectively about America's divisions. They may be those who demonstrate a credible ability to reduce the gap between economic opportunity and the cost of participating in it.

And nowhere is that challenge more visible than in the price of a home.

“San Francisco’s housing market has lost its mind,” so went the headline in TechCrunch last month, and the flurry of articles about the subject confirm it. Here are some numbers:

The market is being propelled by outrageous wealth coursing through the Bay Area’s economy from the artificial intelligence boom. But housing has never been cheap in the area, though this time feels different according to some longtime observers. “What’s different this time is that the benefits or the prosperity of A.I. seems much more concentrated,” Daryl Fairweather, the chief economist at Redfin, told The New York Times. “It’s not that everybody is going out and buying homes.”

New home construction fell in May to the lowest level since the 2020 pandemic as builders slow their activity because of a backlog of unsold homes as the spring buying season was disappointing. Sales of new single-family homes fell at the start of the year to a four-year low and the market has been sluggish since. The number of new single-family homes on the market is near a 19-year high of just under 500,000. At the current rate, it would take 9.4 months to sell all the unsold new homes, a process that is usually five to six months in a healthy market. There are deals to be had for house hunters since many builders are trying to get homes off their books. Some 35% of builders offered discounts in May, according to the National Association of Home Builders.

The last “bubble house” extant in the US is for sale in Pasadena, CA. Designed by architect Wallace Neff in the 1940s and also called a shell house, the construction started with the inflation of a giant balloon, which was covered with steel mesh and sprayed concrete to create the structure, avoiding the need for materials like wood and nails. The process was cheaper and faster — a structure could go up in as little as 48 hours — and Neff saw it as a way to solve the affordable housing shortage after World War II. Neff branded his houses as “Airform designs” and built some 2,500 of these homes during his lifetime, well short of his goal of 400,000.

Those interested in ponying up nearly $2 million for the 1,246 square-foot, two bedroom, one bath dwelling, which was recently renovated, it’s time to bust a move. We checked the listing recently and it was under contract.

You can earn free prop.text merch for referring investors to the newsletter

25 referrals - hat 🧢
50 referrals - tee shirt 👕
100 referrals - weekender bag 🎒

Copy & paste this link: {{rp_refer_url}}