The experts generally agree that the fundamental core problem of the housing crisis is simply supply and demand. We will discuss the supply side later, but it is essential to understand what has been driving demand for several decades now. Most projections predict that market demand will increase exponentially in the decades to come. We are beginning to see a much greater convergence of growth factors that have combined long-standing growth patterns with newly emerging ones attributed to market forces, climate change, and emerging technologies.

Historically in the United States, there has been a trend for our population to move from rural areas to urban ones. This has been through immigration, as people from other countries have come to the U.S. seeking opportunity, and through in-migration as those seeking better jobs within the country have migrated to the cities. Three hundred years ago, two percent of the world’s population lived in cities. Two hundred years ago, it was 10 percent. By 1900, 40 percent of the United States had urbanized. By 1950, it was 50 percent, and by the turn of the millennium, 80 percent.

Land

Buildable land near employment and services is a limited resource, and like every limited resource, the scarcer it becomes, the more costly it becomes to acquire. The market forces associated with real estate encourage development in the fringes of population centers where land is cheaper, straining the resources of suburban cities and adding to land scarcity.

Density

For decades the use of exclusionary zoning practices that favor single-family home development has significantly limited the ability for developers to provide the necessary diversity of housing products and densities to combat sprawl and address housing affordability. Developers are willing to build products that can meet these demands but are unable because of building height, maximum density, and parking regulations.

Labor

The construction labor shortage has also become problematic in the last decade. Despite the demand, contractors are challenged to take on new projects. Those taking on projects have to bring in labor from other regions and increase wages to maintain workforces, resulting in higher construction costs. The recent Covid-19 pandemic has only highlighted the issues of maintaining a workforce susceptible to health concerns.

In 1948 when Levittown was founded, millions of Americans needed homes. Fifteen years of economic depression and war had stalled housing starts. Returning World War II veterans were coming home armed with the G.I. Bill of Rights and guaranteed Veterans Administration low-interest loans and in desperate need of a place to live and start their families. The demand was so high and the supply so low that families lived in chicken coops and railroad cars to have a roof over their heads. Levitt and Sons turned the housing industry on its head.  They improved efficiency in construction by applying assembly line processes to construction. They cut out the middleman to obtain special pricing on state-of-the-art appliances and technologies. They amassed public outcry and support to change obstructive zoning laws. By 1951 when the last home was sold, over 17,000 homes stood in Levittown.

Harness the Power of Technologies

Emerging technologies allow us to harness the power of current exponential technologies and digitization to reduce the complexity of the materials used and the waste associated with the construction industry.  According to the Bureau of Transportation Statistics, Construction and Demolition Waste accounts for 23% of our national waste stream. Up to 30% of all building materials delivered to a construction site can end up as waste. While poor estimating can contribute to these numbers, the largest contributor is the subtractive processes that have dominated how we have constructed our buildings for most of human history. Our building materials are delivered to the construction site in standardized sizes and then cut down to size. If it is not separated and recycled, the remainder ends up in the landfills, further contributing to unnecessary costs passed on to homeowners and renters.

Computer Modeling and Recycled Materials

The use of computer modeling, additive manufacturing, and versatile, recyclable materials may provide the answer to these concerns. Computer modeling software allows for the complete modeling of every component and runs calculations to maximize energy and structural efficiencies. 3D printing technology allows for building each component to precise specifications without the need for expensive molds and forms to create custom, unique pieces with zero waste. By borrowing innovations developed by the aeronautics and automotive industries, carbon fiber composites hold enormous potential for construction. Carbon fiber has properties that are stronger than steel and lighter than aluminum. When combined with industrial plastics, we can achieve a non-conductive, non-corrosive, water and heat-resistant material that can be printed with exponentially growing 3D technology. A single material composite that can provide a building skin, weather barrier, structure, insulation, fasteners, and finish can dematerialize most of the materials required for construction.

Less Automobile-Centric

By economic necessity, the cities and suburbs of the future will be far less automobile-centric.The average car owner spends only 5% of the time driving, and a family of two adults generally owns two cars. AAA estimates that the average cost of car ownership is about $9,000 annually per car, an increase of about 5% from last year. When you consider the cost of a car payment, maintenance, insurance, and fuel, the opportunity for savings is significant, especially if the convenience of car ownership can be met in other ways. By following the trends of consumers and capital investment, we see a dramatic shift from car ownership to autonomous vehicle and ride-share companies.

Energy Independence

Energy independence can go a long way in reducing housing costs. EnergyStar.gov estimates that the average U.S. household spends an average of $2,060 each year on utility bills. The easiest way to reduce these costs is to eliminate redundancy in energy delivery and needs. In the last several years, we have seen a transition to all-electric multi-family development to save costs in redundant infrastructure, space for providing meters, and fewer entities to coordinate regulations and requirements. Electricity has shown the most significant potential for innovation and energy cost savings in the future. Solar energy is the most abundant energy source on the planet. At 173,000 terawatts striking the earth continually, that is more than 10,000 times the world’s total energy use. As the number of solar panels installed in the U.S. increases exponentially and the installation cost stays affordable, homeowners will see a decrease in electricity costs. As the storage capacity and photovoltaic technology continue to improve exponentially, a future where each resident will be able to pull all their energy needs from the sky at no cost is not far away.

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The Internet of Things

Technology utilized in smart home and smart city designs has been gaining widespread use for the last decade and is on the verge of reaching exponential growth and acceptance.  The internet of things explains the cluster of physical objects comprising sensors, software, and other technological devices to interlink and exchange data with other devices and systems.

In the last twenty years, we have already seen how our smartphones have replaced many physical devices and services that we no longer need to pay for, such as camcorders, landlines, newspapers, cable tv, CDs, stereos computers, etc. Through the further implementation of inexpensive sensors, artificial intelligence, faster broadband, Bluetooth, and wireless networks, we will be able to demonetize and dematerialize much of the needs of our daily lives, resulting in cost-of-living savings.

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The current response to our housing crisis needs to be in a more sustainable and less resource burdening way. The ability to replace cheap greenfield farmland with acres of yards and miles of roadways is unsustainable. It has created an enormous economic burden on cities required to provide infrastructure and services. Over the years, many studies have been done comparing the costs of public services in suburban and urban cities. A good example is the study, “Smart Growth & Conventional Suburban Development: Which Costs More?” (Ford 2010) that found that more compact residential development can reduce infrastructure costs by 30-50% compared with conventional suburban development. The City of Calgary (2016) developed cost-based development fees using detailed and transparent accounting of infrastructure costs, such as new water and sewage lines, roadway improvements, and other public services. The resulting fees are significantly higher in sprawled locations to reflect the higher costs of providing public infrastructure and services. Fees range from $2,593 per multi-unit unit, $6,267 for a single-family home or 2.5 times.

Another barrier to promoting higher density, smart growth developments in our communities is the significant costs subsidized by federal and local governments to encourage suburban sprawl. Some of these subsidies include federal subsidies for suburban mortgages, tax subsidies that favor sprawl, and the subsidies of urban highways. It will be challenging to incentivize increased suburban density until the actual cost of sprawling development is being paid by the cities, builders, and homeowners.

Fortunately, many local municipalities are beginning to understand and adopt the principles of smart growth strategies. Still, in too many others, the zoning barriers of maximum height restrictions, maximum housing density, minimum parking standards, and exclusionary use requirements prevent the innovation and creativity necessary to respond to the affordability and availability of housing supply.

For the last 70 years, single-family home with a yard, two cars in the driveway, and a family pet represented the ideal desires of the American Dream. As we move forward out of necessity and with a greater sense of urgency to a denser, less resource burdening society, is it possible to maintain those desires in a three-dimensional suburb?