National trends and growing shortages in major US cities impact housing affordability in the Kansas City region

There is a housing shortage across the country. The U.S. is missing nearly four million units and the Kansas City region is no different with an estimated shortage of nearly 24,000 homes.  Additionally, underproduction is one of the factors driving higher home prices and rents. In the Kansas City region, nearly 64,000 households are unable to find a unit they can afford. 

Housing scholars and policy experts point to several trends driving the affordability crisis across the nation from supply-side issues such as production, to systemic barriers such as zoning and building codes. Earlier this summer, Jenny Schuetz, former senior fellow at The Brookings Institution, was in Kansas City to discuss her book "Fixer Upper," which details these national trends and their impact on our region. In the book, Schuetz discusses the universe of problems intertwined in the housing crisis, from under production, zoning and innovative solutions to mitigating poverty. 

High costs in larger cities send people looking for more affordable housing options. Schuetz points out that national trends and growing shortages in major cities across the country have significant impacts on the cities in the heartland and Midwest. This creates a ripple effect causing vacancy rates to drop in “more affordable” cities and prices to quickly increase. MARC research shows the production of homes in our region continues to lag peer regions and has created a shortage of close to 24,000 homes. Putting this research into the context of  Schuetz’ analysis illustrates that broad policy intervention that increases housing supply everywhere would greatly benefit the Kansas City region.  

While more homes are desperately needed, homebuilding exists within a regulatory framework that influences much more than just ground-up construction. Zoning policy is part of this framework and typically favors single-family detached homes, making the development of higher density housing more difficult. Schuetz highlights local zoning policy as a critical barrier to housing development. Additionally, new housing development is pushed to the periphery of cities and into suburbs, rather than along high-traffic transit lines with proximity to jobs. Schuetz’s research points us to the conclusion that to alleviate the burden of renters, potential homebuyers and communities alike, changing zoning policy and cutting through red tape may be a key solution to mitigating the housing crisis. 

Finally, in addition to these changes to alleviate supply side pressures, a case can be made for implementing policies that focus on the individual trying to find a home as well. In some areas across the country there is interest in using direct cash payments as a means of reducing poverty and helping people find housing opportunities. Schuetz argues that building more housing benefits people who can afford to move, but it does little for individuals struggling financially. National research shows that 3 in 4 extremely low-income renters are severely cost burdened. Building more housing is critical to ending this crisis, but has limited impact for individuals struggling to make ends meet. The city of Denver has already seen success with a direct cash payment program for its unhoused population and HUD is considering the launch of its own cash payment program to replace vouchers.

There is no singular solution to fixing the housing affordability crisis; rather many interventions are needed to create a more effective system that works for all people and communities. Schuetz’s book highlights the struggle of navigating the contemporary housing crisis and provides perspective on how local communities can address these challenges to create more housing at more price points for more people in more places.