The buzzword of all buzzwords these days is "affordable housing." You can't turn on the TV, listen to the radio, or hear a single political ad without hearing something about "the housing shortage" or the need for "affordable housing." Oh I love how politicians and regulators latch on to this topic. If you want my personal opinion, and most people don't, yet, I tend to give it anyway... this "housing crisis" was caused by our politicians, and now they are promising to fix it… ha, don't hold your breath.

Before we go down the road to a solution, let's briefly discuss how we got here.  First, the Great Recession- strike ONE. The government allowed subprime mortgages, had very lax lending standards and had limited regulations on financial institutions. Google would tell you that the Great Recession lasted from 2007 until mid-2009, but it felt much more like 2013 until I could finally afford Chick-fil-A again. The Recession left young people with historically high levels of student debt or without a job. Fewer and fewer people could afford a house, so housing construction slowed to a slow creep at best. It was like stopping a locomotive… Home builders started laying off land acquisition people, stopped hiring engineers (that was fun) and the creation of new homes and lots slowed dramatically.

In 2015 or so, things started up again- but then again, they almost had to. The need for housing was there; we just couldn't figure out how to make people who had been jobless, who were still living in fear of being laid off, or were crushed with student loan debt be able to afford a house. One of the government’s great ideas then was to lower interest rates. Let's keep lowering interest rates and get this locomotive started again. Kind of a good idea… but keep reading.  And so, off we went… surveying and engineering like crazy to get lots and houses approved and ready. But remember… we stopped a locomotive, and now we needed to restart it.  It doesn't happen overnight or in an instant- it takes years, literally!

So, we get things going… and BAM… Covid!!! Strike TWO!  Let's shut down the recovering economy, scare the shit out of everyone, and then let's plow 850 BILLION with a B into the economy. People start buying houses like crazy... LIKE CRAZY!!!!! And why not? Interest rates are below 3%, and we just pumped 850 BILLION into the economy… existing houses went off the shelf. People paid over asking prices, and the dam of pent-up buyers was unleashed!

But hey, wait- that is inflation… we (our fearless leaders) better slow this locomotive down. Remember the locomotive we slowed down and then wanted to restart? Yeah, that one. We will slow it this time by raising interest rates and raising interest rates and raising interest rates. Strike THREE!

So now we (our fearless leaders) have stopped almost anyone from selling their existing homes (Because why would they? They are sitting pretty with a 3% mortgage) and created a breeding ground for the new home sellers. Now, the new home sellers can skim that wealthiest layer of cream off of the top of the cup of demand! Oh, how sweet it is.

Thank you, government for creating this shortage by stifling supply. The harder you make it to get lots approved, the more valuable you make those lots and, in turn, the houses. And while there remains huge demand, there will remain high housing costs. You should enroll in a class called Economics 101… supply and demand. When demand is greater than supply… prices increase. When supply is greater than demand… prices decrease. YOU CANNOT REGULATE YOUR WAY OUT OF THE HOUSING SHORTAGE!!!  Plain and simple.

The only solution, and it isn't quick, is to BUILD YOUR WAY OUT!!  This isn't about profit, it isn't about land prices, it isn't about building a more cost-effective house. It is a lack of supply, period, end of story. The harder the process becomes, and believe me, it is difficult, time-consuming and expensive, the more valuable the lots become as the supply drops. Put simply, we are making people faster than we are making houses!

I am Denny L. Howell, and I approve this message!