President Donald Trump’s administration is considering declaring a housing emergency to address regulatory barriers that have caused a significant shortage of homes in the United States. Treasury Secretary Scott Bessent highlighted the weakest summer home sales in a decade, with over 15% of transactions falling through in July, the highest cancellation rate since record-keeping began in 2017. Prices, although below pandemic levels, remain too high for working- and middle-class Americans.
Bessent argues that the housing emergency declaration is long overdue. For too long, politicians have praised homeownership while supporting policies that make it harder to achieve. The U.S. is now producing insufficient homes to meet demand, and existing homes have become more costly due to government restrictions on building and investing.
National housing experts estimate that the United States is short between 3.2 million and 7 million homes, depending on the methodology used. Freddie Mac reports a gap of about 3.8 million units, while the National Low Income Housing Coalition claims a shortage of over 7 million affordable and accessible units. These gaps contribute to rising home prices.
The article argues that government regulations are largely responsible for causing the shortage. Studies from the National Association of Home Builders indicate that federal, state, and local regulations make up nearly 24% of the price of a new single-family home and over 40% of the cost of new multifamily housing. Zoning limitations, lengthy permitting processes, and varying building codes across jurisdictions create unnecessary costs and delays. In some metro regions, it can take over a decade to transition a project from concept to completion.
If the Trump administration proceeds with declaring a national housing emergency, its plan should not involve micromanaging local housing markets or creating new federal bureaucracies. Instead, it should focus on removing obstacles that hinder the private sector from meeting the growing demand for housing. The article criticizes Washington’s tendency to scapegoat the private sector and advocates for policies that promote more construction and investment.
Examples like California highlight the negative impact of stringent zoning and environmental regulations, which have stalled building and left the state short of almost 1.3 million units. In contrast, states like Texas have seen faster growth in housing supply and more moderate price increases due to streamlined permitting and higher-density development. Home prices are declining faster in Texas than in any other state.
The article also criticizes efforts to blame rent pricing software and housing investors for the affordability crisis. It points out that increased institutional investment leads to more rental housing and lower rents, as demonstrated by a study from New York University. This indicates that when investment is welcomed and new units are built, families benefit through lower costs and more options.
The article concludes that the Trump administration should focus on increasing market activity rather than restricting it. Proposed solutions include catalyzing reform to remove outdated zoning restrictions and streamlining federal permitting for infrastructure projects that support housing, such as roads, utilities, and transit. These changes could encourage more construction and address the housing shortage effectively.
The White House has already prioritized economic policies that have freed workers and businesses from unnecessary burdens. Housing should receive the same treatment, with less government interference and more room for private investment. This approach has shown success in the past, and federal leaders should allow it to work again.