Solving the Housing Shortage is a Force Multiplier

Read the full report here

In the United States, we have an unprecedented opportunity to reimagine where and how we build housing. Our country faces a severe housing shortage: We need to build at least 14 million homes to meet demand over the next decade. This shortage drives up housing costs, prevents people from living near good jobs and schools, and makes it all but impossible for many would-be buyers to break into the housing market.

Fortunately, policymakers are taking notice. Between July 2024 and July 2025, state and local governments passed 124 housing bills across 33 states aimed at increasing housing production. At the federal level, the recently enacted 21st Century ROAD to Housing Act similarly intends to boost supply. And this is only the beginning — throughout the country, bipartisan momentum continues to build.

Recent bipartisan reforms share a throughline: they remove the restrictions and barriers that create artificial housing scarcity. Once these strangleholds loosen, opportunities for ingenuity abound. But it’s not a given that the policies that governments enact will be the best policies for getting homes built at the scale, speed, and prices we need. And depending on how we proceed, we may also leave major benefits on the table.

The best housing policies make it easier to build homes. They also do something critical: they recognize how housing connects to other domains. America’s affordability problem, for instance, is bigger than home prices and rents. Household spending on energy and transportation is heavily shaped by where homes are located and how they are built. At the same time, increasingly frequent and intense disasters and extreme weather both impose direct costs and contribute to escalating insurance prices that squeeze family finances and limit housing. Each year, disasters destroy the equivalent to one month’s worth of the nation’s new home construction. And a constrained electric grid and rising utility costs add to the pressure.

Our research shows that when done right, new homes are a force multiplier: they lower housing, transportation, and energy costs; strengthen resilience and insurance markets; improve state and local fiscal health; protect open and working lands; increase grid reliability; and reduce emissions.

Using evidence to find the best housing policies

This white paper puts forth the most impactful housing policies that states and localities can implement to stimulate housing production at the scale and speed we need. Given today’s fiscal constraints, we focus on state and local policies that require limited public dollars, which then prime the pump for market forces, private capital, and targeted public investment to get housing built. Based on an extensive research review, analysis of case studies from across the United States formal interviews, and less formal conversations with hundreds of subject matter experts, we surface evidence-based policies to:

  1. Solve the U.S. housing shortage faster and more cost effectively, and
  2. Make housing a force multiplier for progress.

Achieving these goals means rejecting the myth that we must choose between building more housing and pursuing other societal objectives. Instead, we must recognize how housing intersects with these issues and adopt policies that align them.

In short, we must build for benefits.

While the systems are complex, the agenda is simple: We need more of the right homes in the right locations, at the lowest costs. The evidence overwhelmingly shows that the following principles should guide where, what, and how we build:

In some cases, this may mean new construction. In other instances, it may mean repurposing non-residential buildings for housing, or adding units to existing housing.

Moreover, what constitutes an established neighborhood differs by geography. In urban areas, the best opportunities may center on more housing near transit and robust public infrastructure. In rural areas without transit or existing infrastructure, the best opportunities may center on proximity to jobs, schools, and the other routine needs of daily living.

From evidence to action: six state and local tactics

To turn these principles into results, we’ve identified six tactics that localities and states can adopt with limited public dollars to solve the housing shortage faster, more cost-effectively, and with greater benefits to households and communities. They create the conditions for private and public capital to flow faster and more efficiently into homebuilding. When implemented as a package, these tactics can increase housing production quickly, affordably, and at the scale our current shortage demands. The research draws on what’s already working across the country, and focuses on aligning targeted deregulation with thoughtful building standards and strategic land, transportation, and utility policies.

These tactics are:

  1. Cut red tape specifically to allow homes of all shapes and sizes in connected, lower-hazard established neighborhoods.
  2. Put public land in lower-hazard established neighborhoods to work.
  3. Simplify public financing so dollars for income-restricted housing and starter homes go further.
  4. Make disaster-prepared construction the norm.
  5. Build lower utility costs into new homes from the start and make homes critical energy infrastructure.
  6. Align utility reforms with housing affordability and grid reliability.

These tactics mix two approaches. Some make it easier to build by eliminating regulations that slow construction. Others position state and local governments in a proactive role: such as putting municipal, and state-owned land to work; offering pre-approved plans, training, and financing that speed approvals and expand the pool of small developers and builders; or recruiting modular builders to establish local factories.

Scaling housing reforms that work

These reforms need to be dramatically scaled across the United States. And they can be. Colorado, for example, is beginning to adopt the integrated approach this paper recommends. Since 2022, the state has legalized more housing of all shapes and sizes and at all budgets in established neighborhoods; strengthened wildfire standards; reformed insurance standards; incentivized efficient, electric construction; developed a new low energy and carbon code, and enabled virtual power plants and fairer electric rates. Many other localities and states across the U.S. have also made notable progress.

In the following report, we lay out the state and local government actions that can, collectively, turn America’s housing shortage into an engine of prosperity rather than a brake. The task is to scale reforms that make resilient, efficient housing faster and more cost effective to build. The goal is not to sacrifice speed; it is to remove real cost barriers to dramatically increase production and deliver homes that people need and that are affordable for the long term.

Read the full report here

Unlocking Housing Supply is Only the First Step. The Real Opportunity Lies in What, Where, and How We Build.

Housing in America is expensive, and there isn’t enough of it in the places people want to live. The resulting competition among renters and buyers drives up home prices and rents, widening the gap between what people earn and what it costs to keep a roof overhead. Today, roughly 750,000 people are homeless. Teachers, healthcare providers, first responders, and other critical workers are increasingly priced out of the communities they serve, while homeownership — long a primary pathway to building wealth — drifts further out of reach.

Decades of underproduction have led to today’s housing shortage and high home prices and rents. The housing shortage is currently estimated at about 4 million homes; we’ll need to build at least 14 million over the next decade to close this gap and meet additional demand. In our Civic Research Agenda published earlier this year, we at the Federation of American Scientists (FAS) found that tackling the structural, market, and policy factors that most strongly drive housing affordability and shape economic mobility for individuals and families is a top priority for cities and counties across the country.

Fortunately, policymakers are taking notice. Between July 2024 and July 2025, state and local governments passed 124 housing bills across 33 states aimed at increasing housing production – at improving legacy approaches to land use, slow approvals, outdated regulations, and other systemic barriers that have constrained housing for too long. At the federal level, the recently enacted 21st Century ROAD to Housing Act similarly intends to boost supply. 

Once these strangleholds loosen, opportunities for ingenuity in housing abound. But it’s not a guarantee that the housing policies that governments enact will be the best policies for getting homes built at the scale, speed, and prices we need. And depending on how we proceed, we may also leave major benefits on the table.

Housing as a force multiplier

A new report from the Housing Multiplier Project and the FAS Center for Regulatory Ingenuity lays out the most impactful policies to stimulate housing production and how these policies can make housing a force multiplier for progress. Recent bipartisan housing reforms share a throughline: They remove the restrictions and barriers that create artificial housing scarcity. Yet as the report points out, unlocking housing supply is only the first step. The best policies recognize how housing connects to other domains.

America’s affordability problem, for instance, is bigger than home prices and rents. How we build affects household costs like insurance and utilities. In Alabama, fortified roofs and stronger building codes are helping bolster the insurance market for new and existing homes alike, while making homes far safer. In Vermont – a state where manufactured homes typically burn expensive fuel oil or propane for heating, new superefficient manufactured homes can cut annual energy bills by about $2,700 per year compared to existing stock. Across the country, building more efficiently can provide relief for the 80 million people struggling to pay their energy bills, while protecting people from the escalating threat of extreme heat.

Where we build influences affordability as well. Pew finds that homes built in established neighborhoods rather than on greenfields save taxpayers an average of $21,000 per home in roads, water, sewer, and utility infrastructure and up to 50% in ongoing maintenance. More new homes near jobs and services also save an average of $700 per person per year in fuel and vehicle costs through shorter commutes and fewer miles driven. 

Much undeveloped land is also in areas, such as floodplains or the wildland-urban interface, that are becoming increasingly risky. Disasters – hurricanes, floods, fires – destroy the equivalent of one month’s worth of new home construction in the United States every year. What’s the point of building new homes if those homes are just going to get flattened? Even homes left standing are facing rising insurance costs that simply don’t pencil for most people. 

It’s not enough to just build. We must build for benefits. While the systems are complex, the agenda is simple: We need more of the right homes in the right locations, at the lowest costs. The evidence overwhelmingly shows that the following principles should guide where, what, and how we build:

In some cases, this means new construction; in others, it means repurposing non-residential buildings or adding more units within existing housing. In urban areas, the best opportunities for housing may be near transit and robust public infrastructure; In rural areas, direct proximity to jobs, schools, and other routine needs of daily living may be bigger priorities.

Regardless of geography, the underlying principles remain the same. Ingenuity in housing policy can expand supply and lower costs across the board while simultaneously strengthening resilience and insurance markets; improving state and local fiscal health; protecting open and working lands; lowering energy costs; increasing grid reliability; and reducing emissions by at least 70 million tons per year – equivalent to half the country buying electric vehicles by 2035. 

But the full emissions and economic opportunity is even larger. Strategic housing reforms position homes as critical energy infrastructure – they put in motion a built environment that strengthens the grid, optimizes clean energy, and serves as the backbone of the energy transition. Every new home that is built to be grid-interactive, efficient, and with low embodied carbon materials compounds emissions savings, while lowering household utility bills, easing strain on a congested grid, reducing the need for new fossil fuel peaker plants, and maximizing the use of clean energy on the grid. Paired with utility reforms like heat-pump-friendly rates and virtual power plant infrastructure, this can cut utility costs and emissions dramatically by reshaping how tens of millions of new and existing homes are heated and cooled, while easing peak loads on the grid. More homes also feed a positive feedback loop that cuts transportation costs and emissions: more people justify better transit, sidewalks, and bike infrastructure, which further reduces hours spent in the car.

Putting the principles to work

The report focuses on six tactics that localities and states can adopt with limited public dollars to solve the housing shortage faster, more cost-effectively, and with greater benefits to households and communities. They create the conditions for private and public capital to flow faster and more efficiently into homebuilding. These tactics are:

  1. Cut red tape specifically to allow homes of all shapes and sizes in connected, lower-hazard established neighborhoods. 
  2. Put public land in lower-hazard established neighborhoods to work.
  3. Simplify public financing so dollars for income-restricted housing and starter homes go further.
  4. Make disaster-prepared construction the norm.
  5. Build lower utility costs into new homes from the start and make homes critical energy infrastructure. 
  6. Align utility reforms with housing affordability and grid reliability.

When implemented as a package, these tactics can increase housing production quickly, affordably, and at the scale our current shortage demands. In Colorado, integrated housing reforms aligned with these tactics have legalized more housing of all shapes and sizes and at all budgets in established neighborhoods; strengthened wildfire standards; reformed insurance standards; incentivized efficient, electric construction; developed a new low energy and carbon code; and enabled virtual power plants and fairer electric rates. 

In Montana, conservatives who saw overregulation and progressives who saw an affordability emergency converged on the same solution: legalize more homes. The reform package they designed and adopted dismantled regulatory barriers across the board: rewriting local planning procedures; allowing duplex, triplex, and fourplex housing and ADUs as-of-right in single-family zones; legalizing larger apartment buildings in commercial zones and buildings up to six stories; enacting single-stair reforms; capping parking mandates; and making it easier to build manufactured housing. 

The window for this work is open now. The pro-homes movement has momentum across regions and parties. The task ahead is to convert that momentum into law and executive actions, improving both housing policy design and implementation in ways that deliver tangible, immediate benefits for Americans (e.g., more affordable and desirable homes) while also making progress on higher-order societal goals (e.g., stabilizing insurance markets and driving down emissions). If we get this right, we won’t just solve a housing shortage. We’ll strengthen the fabric of our nation.

Modernizing Colorado Permitting to Lower Housing and Construction Costs

Among states, Colorado ranks 50th of 51 states (including Washington, D.C.) as the least affordable housing market, reflecting high purchase prices, construction costs and regulatory friction. Why has housing “suddenly” become so expensive? One known contribution is permitting. For routine residential projects, delays increase the cost of repairs, replacements, panel upgrades, rooftop solar, and other household improvements.They also disrupt contractor scheduling, reduce the productivity of a construction, and repair workforce that is already stretched. Colorado’s permitting system is, as most individuals want, decentralized. Cities and counties administer building permits, while the state regulates selected activities and structures, resulting in different application requirements, review processes, technologies, and timelines across jurisdictions. The most important modernization challenge is not necessarily the technical building code itself, but the administrative fragmentation surrounding routine, standardized projects, such as those for HVAC, water heaters, or roof work.

Colorado is well positioned to modernize permitting for routine, low-risk residential projects by implementing a risk-based scoring system for faster review and approval. Permitting plays an important consumer protection role, so modernization should preserve inspections, documentation, enforcement, and penalties while eliminating avoidable administrative delay. Colorado should pursue three reforms:

  1. Private builders, in coordination with DOLA, should develop a risk-based framework that distinguishes projects requiring full review from those eligible for simplified or automated approval. 
  2. The state should help and incentivize local governments to adopt fast-track pathways, tools, data standards, and transparent performance measures. 
  3. The General Assembly should authorize a thoughtfully considered third-party certification pathway for eligible projects, subject to independence requirements, audits, inspections, and state oversight. Together, these reforms would reduce delays and household costs while preserving local code-enforcement authority and public safety.

Challenge and Opportunity

Colorado’s affordability challenge is characterized by a growing gap between household earnings and the cost of basic services, housing, insurance, transportation, utilities, and home maintenance. The pressure is especially acute for young families, first-time and middle-income homeowners, and employers trying to attract and retain workers in competitive markets. While the Front Range faces the most visible affordability strain, mountain, rural, and Western Slope communities also face rising costs and limited contractor capacity. 

Permitting is not the only driver of these costs, but it is a practical and often overlooked administrative lever. Routine residential projects can be delayed by rules, inconsistent documentation requirements, manual intake processes, and local interpretations of similar project types. These delays increase financing costs, disrupt contractor scheduling, and raise prices for homeowners. They also reduce the productivity of a construction and repair workforce that is already stretched. The impact can be quantified in three ways: 

  1.  the number of households/projects affected
  2. the number of days added to routine work(
  3. the economic value of that delay. 

Recent CSI research in Arizona found that permitting added about 23 days to residential project timelines on average, and each additional day of approval time was associated with roughly four additional days of total project time. Because the affected projects are high-frequency household improvements, HVAC replacements, water heaters, electrical panels, roof work, and rooftop solar, even modest delays can scale quickly across thousands of households. For example, if 25,000 routine residential projects in Colorado experienced only a 10-day avoidable delay, that would equal 250,000 household-days of delayed repairs or upgrades, before accounting for contractor downtime, rescheduling costs, financing costs, or higher consumer prices. 

The opportunity is to distinguish between projects that genuinely require complex review and projects that can be safely processed through standardized pathways. A water heater replacement, like-for-like HVAC replacement, panel upgrade, or standardized rooftop solar installation should not face the procedural friction as complex replacements or developments. 

When jurisdictions treat routine work as a custom administrative process, Colorado households pay for avoidable delay. For example, selected jurisdictions in Colorado already have a partial model in app-enabled permit processing for solar projects, which is available in Denver, several smaller jurisdictions, and through the state electrical permitting process for eligible solar projects. That system uses standardized criteria to move qualifying residential solar permits through faster front-end review while preserving inspection and code-enforcement authority.

Routine projects are a high-return starting point because they are common, standardized, and directly affect household costs. Faster permitting for repairs, replacements, panel upgrades, and rooftop solar can produce immediate benefits while building the infrastructure for broader permitting modernization over time. 

The infrastructure can be built through pragmatic effort because each decision maker has a defined role: local governments run the permitting systems and/or work with a private provider while maintaining authority when it is needed, the Governor’s Office can convene agencies and create public performance pressure, the General Assembly can authorize legislation and one-time implementation funding, and state housing and regulatory agencies can provide model rules, technical assistance, and safety oversight.

Build from Existing Models

Colorado should not treat this proposal as starting from scratch. SB25-002, the 2025 regional building codes legislation for factory built structures, provides a useful template: it creates a state-led framework, accounts for regional conditions, limits inconsistent local treatment of factory built housing, allows third-party review and approval of final design and construction plans, and requires audits of third parties that review plans or conduct inspections. That model is directly relevant because it balances statewide clarity with local implementation and oversight rather than relying on broad preemption alone.

The state can also continue to build on its experience with SolarAPP+, an automated review platform for eligible residential rooftop solar projects. SolarAPP+ has been available to Colorado permitting authorities since its national launch in 2021, although adoption within Colorado has been gradual and remains limited to participating jurisdictions and eligible projects. SolarAPP+ demonstrates how standardized project information and objective eligibility criteria can move routine projects through front-end review quicker while leaving inspections and enforcement with the permitting authority. Its principal lesson for the broader proposal is that automation works best when project categories, required documentation, and code-compliance checks are defined in advance.

Colorado can also glean some insight from California. California’s AB 253, signed in 2025, allows an applicant to retain a private professional provider for residential plan check when the local review timeline exceeds 30 business days or when no applicable reviewer comments or sign-offs occur within 30 business days. San Diego’s implementation guidance illustrates the guardrails Colorado should emphasize: the private provider must be, in some way, credible of the trust offered by purchasers, must not have a financial interest in the permit or plan preparation, must submit an affidavit and plan-check report, and city inspections continue. The lesson is not to outsource safety; it is to offer a pressure release valve for delays while preserving public inspection and enforcement authority. 

These examples suggest three design lessons for Colorado: 

  1. start with clear project categories
  2. require independence and auditability for any third-party reviewer
  3. fund the data infrastructure needed to compare jurisdiction performance. 

Without legislative direction and resources, a performance report may be difficult to implement because local permit data are often inconsistent, unavailable, or not reported in comparable formats. 

Plan of Action

Recommendation 1. Establish a risk-based framework for routine residential permitting.

Before adopting statewide permitting standards, the Governor’s Office should direct DOLA’s Division of Housing to convene an official technical working group to develop a risk-based framework for routine residential improvements. At the same time, an independent private-sector group should develop and publish its own proposed framework using comparable project categories and safety criteria. The independent review would provide an external benchmark and identify areas in which government and private experts reach similar or different conclusions. After independently developing their recommendations, the two groups should develop a private-public technical working group with co-chairs from the private sector and one from DOLA to resolve disagreements. Although debatable whether independence would be the most effective path initially, an important aspect of the scientific process is independent verification, and as such, independent verification is what is suggested here. As a point of note, perhaps the most comparable example to what is proposed here is the National Renewable Energy Laboratory’s development of Solar APP+, built collaboratively with local governments, code-development organizations, and industry stakeholders to establish standardized criteria for automated residential solar permitting.

As a point left for debate, after considering both groups’ findings and the joint group’s work, and after publishing an explanation of how significant disagreements were resolved, policymakers may want to debate whether responsibility should lie with DOLA for the final recommended framework or with a private sector-led group. Lowering the cost of permitting may be better achieved through a joint effort, at least initially. After confidence is built, the process could potentially be improved by using just a private industry-led group, similar to the way the Motion Picture Association assigns movie ratings through its Classification and Ratings Administration. The General Assembly would determine which elements require statutory authorization, while DOLA would adopt administrative rules only within authority granted by law.

The framework should classify routine projects, such as HVAC replacements, water heaters, electrical panel upgrades, rooftop solar, roof work, and similar improvements, into permitting tiers based on risk, complexity, inspection needs, and consumer protection concerns. For example: 

Each tier should specify minimum documentation, inspection requirements, audit rates, consumer notices, correction procedures, and enforcement consequences. Once developed, the tiered framework should become the basis for model rules, application checklists, public reporting measures, and future legislation that improve consistency across jurisdictions while preserving local authority over inspection, enforcement, and code compliance. The same working group should also define a phase-two option for selected larger residential or post-entitlement permit categories, so the state can move beyond routine home improvements without delaying the initial reform.

Although the proposed four-tier structure would be tailored to Colorado, its individual elements have established precedents. SolarAPP+ provides a model for automated review of standardized projects; California provides an example of independent professional review when local timelines are exceeded; and Colorado’s factory-built structure framework demonstrates how third-party review can operate under state standards and audits.

Recommendation 2. Incentivize fast-track approval pathways

The state should use DOLA’s Division of Housing as the lead agency for encouraging local governments to adopt fast-track review pathways for standardized, low-risk residential projects, with the Division of Local Government supporting grants, local-government outreach, and capacity building. DOLA should certify jurisdictions that adopt approved fast-track processes with the expertise of builders, economists, and other knowledgeable professionals insight, such as over-the-counter approvals, preapproved templates, automated review tools, instant permits, or shortened review timelines for projects that meet state-defined criteria. The Governor’s Office could support this through executive coordinated competition: setting statewide implementation goals, publishing comparable jurisdiction-level metrics, highlighting high-performing local governments, and making it politically and administratively easier for lagging jurisdictions to adopt proven workflows. The private sector and the state should encourage the sharing of regulatory resources so as to avoid recreating the wheel.

DOLA should pair certification with concrete incentives, including one-time implementation grants to cover software, staff training, consultant support, template development, and process redesign; priority access or scoring preferences for relevant housing, planning, and local government grant programs; and technical assistance for smaller or rural jurisdictions with limited permitting capacity, with the commitment amount of at least $2.5 million. Because comparable permit data are not always readily available, the General Assembly should fund a standardized reporting system and give DOLA clear authority to define data fields, reporting cadence, project categories, and compliance expectations for participating jurisdictions. This approach would use funding, eligibility, technical assistance, public reporting, and recognition as policy interventions while allowing local governments to choose the fast-track model that best fits their staffing, risk profile, and development review process.

Recommendation 3. Create a self-certified pathway backed by state review for self-certification and third-party review of low-risk residential projects

The Legislature should authorize a limited independent professional certification and third-party review pathway for clearly defined categories of routine residential work along the lines of California’s AB 253. To address the conflict-of-interest concern, Colorado should not rely on unrestricted contractor self-certification as the default model. For the lowest-risk, like-for-like work, a licensed contractor attestation may be appropriate only as one piece of documentation, paired with eligibility rules, homeowner notice, inspection rights, and audit exposure by the local government agency. For higher-risk categories, certification should come from an independent third-party reviewer or licensed professional who has no financial interest in the permit, the project contract, or the preparation of the plans being reviewed. 

Under this model, qualified independent professionals or approved third-party reviewers could certify that eligible projects meet state-defined code, safety, documentation, and inspection requirements. The incentive for third-party certifiers would be a clear state-approved market for review services: contractors, utilities, and homeowners could pay certified reviewers or software-enabled review providers to move eligible projects through faster, predictable pathways. The consumer protection incentive is equally important: a homeowner would receive a standardized checklist, clear proof of what was certified, notice of inspection and complaint rights, and a defined enforcement pathway if the work fails to meet code or the certification is false. Certification would not eliminate local oversight; instead, it would allow local governments to issue permits more quickly for projects that meet predefined risk-based criteria while retaining authority to audit, inspect, revoke approvals, require corrections, and penalize false certifications. 

Oversight should include a private registry of approved certifiers, training and renewal requirements, insurance or bonding requirements, conflict-of-interest rules, random audits, complaint tracking, public reporting, and removal from the program for poor performance or false certification. The state would provide its input and oversight through DOLA. The program should also require plain-language homeowner disclosures that explain what the permit does and does not cover, who performed the certification, how to request an inspection or file a complaint, and what remedies are available when a certified project fails audit or inspection. The program should begin with low- to medium-risk categories where code requirements are well understood, such as certain like-for-like equipment replacements, standardized rooftop solar projects, minor electrical or mechanical upgrades, roof work, and other routine residential improvements identified by the technical advisory group. The state could expand eligible categories only after reviewing audit results, inspection outcomes, complaints, and local implementation experience.

Conclusion

Colorado can reduce permitting delays without weakening safety by matching review requirements to project risk and aligning the decision makers that shape the permitting system. By establishing a risk-based framework, incentivizing fast track approvals, and creating a self-certified pathway and third-party review of low risk residential projects, Colorado will make routine residential work faster and more predictable. Colorado does not need to choose between local control and modernization: it can preserve local safety authority while creating clearer rules, faster pathways, and better oversight for projects that do not warrant intensive review.

Frequently Asked Questions (FAQ)
Would this proposal reduce homeowner protection?

It should not. Permits and inspections can save homeowners money by catching errors that they cannot reasonably detect themselves, such as roof, electrical, plumbing, mechanical, or structural defects. The proposal should therefore preserve inspections, documentation, audit rights, enforcement, and penalties. The reform is about speeding up predictable front-end processing for low-risk work, not eliminating the safety checks that protect homeowners.

What is “coordinated competition”?

Coordinated competition means the Governor’s Office and DOLA would create a common framework, publish comparable performance metrics, recognize high-performing jurisdictions, provide technical help to slower jurisdictions, and use grants or scoring preferences to reward adoption of proven workflows. It is “coordinated” because the state defines the framework and data, and it is “competition” because jurisdictions can compare their results and face public pressure to improve without the state taking over local permitting.

Are any states or localities doing something similar?

Yes. Colorado’s SB25-002 on regional building codes for factory-built structures provides an in-state model for state-led standards, third-party review, and audits while preserving local implementation roles. California’s AB 253 provides an out-of-state example of private professional plan check when local review exceeds specified timeframes, with guardrails such as licensing, certification, conflict-of-interest limits, affidavits, city review, and continued city inspections. Colorado also has fast-track review experience through Proposition 123 guidance and automated solar permitting through SolarAPP+ in selected jurisdictions.

Would this proposal preempt local governments?

The proposal is primarily a guided statewide framework, not a broad top-down preemption model. Local governments would continue administering permits, conducting inspections, and enforcing code compliance. The state role would be to authorize risk tiers, publish model rules, provide technical assistance, support public reporting, and offer grants or other incentives for jurisdictions that adopt approved fast-track pathways.

Why focus on routine residential projects instead of larger housing development?

Routine projects are a high-return starting point because they are common, standardized, and directly affect household costs. Faster permitting for repairs, replacements, panel upgrades, roof work, and rooftop solar can produce immediate benefits while building the infrastructure for broader permitting modernization over time. The brief should acknowledge that the connection to housing supply is more indirect for small residential permits than for large housing developments. The stronger near-term claim is cost-of-living relief, homeowner service improvement, and administrative capacity building.

Should the proposal include larger projects?

Yes, as an option. The first phase should focus on routine projects because they are easier to classify and safer to standardize. The legislation or executive framework should also authorize a second phase for selected larger residential or post-entitlement permit categories after the state reviews audit results, inspection outcomes, complaints, data quality, and local implementation experience.

How would safety be protected if approvals move faster?

Fast-track approval should apply to a broad definition of low-risk project categories with standardized requirements. Safety can be protected through consistent monitoring, required documentation, inspections, random audits, penalties for false certification, and local enforcement authority. For any third-party or certified-review pathway, Colorado should require independence, insurance or bonding, training, renewal, complaint tracking, public reporting, and removal from the approved-certifier registry for poor performance.

How should Colorado measure success?

The state should track average approval times, total project timelines, permit-related delays, digital permitting adoption, administrative cost per permit, inspection outcomes, audit results, use of certified reviewers, grant participation, and user satisfaction among homeowners, contractors, and local governments. DOLA should publish comparable jurisdiction-level data so state leaders and local governments can identify where modernization is working and where additional technical assistance is needed. Because this data will not collect itself, the General Assembly should either use the private sector as the lead or fund the reporting system and authorize DOLA to define common data fields and reporting requirements. Tracking and measuring outcomes will help inform future phases of the work.

What would “fast-track approval pathways” mean in practice?

Fast-track approval does not mean eliminating permits or weakening code standards. It means matching the level of review to the risk and complexity of the project. For simple, routine work, local governments could use over-the-counter approvals, preapproved templates, automated review tools, or instant permits. Over-the-counter approval allows staff to approve straightforward applications quickly. Preapproved templates let contractors use standardized plans for common projects. Automated review tools screen eligible projects against objective criteria. Instant permits allow applicants to receive approval immediately when the project fits a defined low-risk category and the required information is complete. In each case, jurisdictions would retain inspection, enforcement, and code-compliance authority.

How much funding would Colorado need for successful implementation of this proposal?

This depends on how much time and resources builders, risk experts, local government experts, and elected officials would be willing to contribute to a system that lowers the cost of repairs and replacements to existing property owners and thereby potentially impacting the cost of new supply of housing. It also depends on the amount of one-time and potential ongoing funding elected officials may be willing to put towards incentives. As an initial estimate, $2.5 million.

FAS Launches New “Center for Regulatory Ingenuity” to Modernize American Governance, Drive Durable Climate Progress

WASHINGTON, D.C. — February 12, 2026 — The Federation of American Scientists (FAS) today announced the launch of the Center for Regulatory Ingenuity, a new hub designed to reimagine how the government tackles “wicked” modern problems while delivering everyday benefits for Americans.

“We can’t manage today’s problems with yesterday’s laws,” said Dr. Jedidah Isler, FAS Chief Science Officer. “The Center for Regulatory Ingenuity will bridge the gap between high-level policy design and on-the-ground implementation, ensuring that government promises translate into real-world results that Americans experience.”

FAS is launching the Center for Regulatory Ingenuity (CRI) to build a new, transpartisan vision of government that works – that has the capacity to achieve ambitious goals while adeptly responding to people’s basic needs. CRI does this by (1) creating high-trust environments to brainstorm and refine the big ideas that will breathe new life into government, and (2) building a “network of networks” that supports policymakers and practitioners in implementing those ideas at scale.

“The administrative state has delivered extraordinary achievements in the past, but today’s operating model is a complete mismatch for the complexity we face. As a result, trust in government has been in the basement for decades,” said Loren DeJonge Schulman, Director of Government Capacity at FAS. “Strengthening government capacity is an investment in democracy and deeply intertwined with climate progress. It requires thinking creatively about how to build the government we need, not endlessly pointing fingers at the government we have–CRI aims to do just that.”

CRI is launching with a focus on climate: a space where there’s an increasingly evident mismatch between the functions the government needs to provide and the tools it has to deliver. FAS is pleased to welcome Climate Group North America, ICLEI USA, and the Environmental Law Institute as core partners in this initial work.

“Today’s rollback of the endangerment finding underscores that we are in a new era for U.S. climate policy,” said Dr. Hannah Safford, Associate Director of Climate and Environment at FAS. “To be clear: there’s no credible scientific basis for that rollback, which FAS strongly opposes. At the same time, it’s worth recognizing that while foundational environmental laws like the Clean Air Act worked to curb industrial pollution, they weren’t designed to guide the economy-wide transition to clean technologies that’s currently underway. There’s tremendous opportunity for innovation on how we design and deliver climate policies that are equitable, efficient, effective, and durable. With EPA stepping back on this front, it’s time for others to step forward.“

With the support of contributors from across the ideological spectrum, CRI is already charting paths for a renewed administrative state, a more responsive government, and ambitious climate policy that lasts. These paths are explored in CRI’s inaugural essay collection, Bureaucracy as Social Hope: An Argument for Renewing the Administrative State. The first two of these essays, “Rebuilding Environmental Governance: Understanding the Foundations”, by Jordan Diamond and collaborators at the Environmental Law Institute, and “Costs Come First in a Reset Climate Agenda”, by Devin Hartman (R Street Institute) and Neel Brown (Progressive Policy Institute) are available now; the remainder will be released in coming weeks. Other authors featured in the collection include:

In addition, CRI is today releasing “From Ambition to Action: Shovel-Ready Policy Solutions for Climate Leaders”. This policy primer, crowd-sourced from dozens of experts and policy entrepreneurs, outlines how motivated public leaders – especially at the state and local level – can turn big ideas into reality, cutting emissions while delivering cheaper electricity, ensuring affordable housing, and improving transportation for all of America.

Moving forward, CRI intends to deliver more detailed playbooks illustrating how an approach grounded in regulatory ingenuity can improve outcomes and achieve goals in these key sectors, which collectively account for two-thirds of U.S. emissions and contribute at least 25% of U.S GDP. 

More information about CRI is available here. For updates, and to stay connected, click here. 



ABOUT FAS

The Federation of American Scientists (FAS) works to advance progress on a broad suite of contemporary issues where science, technology, and innovation policy can deliver transformative impact, and seeks to ensure that scientific and technical expertise have a seat at the policymaking table. Established in 1945 by scientists in response to the atomic bomb, FAS continues to bring scientific rigor and analysis to address national challenges. More information about FAS work at fas.org.

Media Contact: Katie McCaskey, kmccaskey@fas.org, (202) 933-8857

The U.S. Needs to Build More Houses in Future Receiving Cities

After a 50-year population boom, migration to the Sun Belt is skidding to a halt. Instead, the scorching heat and devastating storms increasingly common across the southern (and coastal) United States are prompting Americans to consider moving to more geographically resilient regions. New America estimates that 20 million Americans will relocate in the coming decades to escape extreme heat, drought, sea-level rise and natural disasters such as tropical storms, flooding, and wildfires. Many of them are likely to end up in “Receiving Cities” in the Midwest, Northeast, and the northern Great Plains.

Many anticipated “Receiving Cities” – places like Cincinnati, Duluth, Buffalo and Detroit – could benefit from the economic stimulus and revitalization that often accompany population inflows. These cities have a large carrying capacity but have suffered from deindustrialization, disinvestment, and population outflows in the last half century.

Yet at present, many Receiving Cities aren’t positioned to support an influx of residents. The rapid and unplanned arrival of transplants could overwhelm housing supply (which is already in shortfall across much of the country), increase housing insecurity and displacement, and place additional stress on federal and local rental and homeowner assistance programs, legal aid clinics, and other housing-related services. 

Because weather-related migration is not presently occurring en masse, the new administration has an opportunity to (i) increase the preparedness and socioeconomic appeal of Receiving Cities, in large part through production and preservation of housing for all income levels; and then (ii) encourage and support American households in relocating to these communities. The federal government should designate “Receiving Cities” to which it will allocate funds and tax incentives aimed at producing and preserving affordable housing, in anticipation of population inflows. 

Challenge and Opportunity

How will the Sun Belt Exodus Unfold?

Over the last 50 years, Florida, Texas, Arizona, and other Sun Belt states have experienced a boom of residents seeking affordable housing, low taxes, and balmy weather. These population inflows have had a significant positive impact on local economies by creating jobs, boosting housing markets, and stimulating small businesses. 

Yet extreme weather and natural disasters are starting to reverse this trend. A study published in July 2024 by the Federal Reserve Bank of San Francisco shows that the U.S. population is starting to migrate away from areas increasingly exposed to extreme heat toward historically colder areas, which are becoming more attractive as extreme cold days become increasingly rare. Meanwhile, analysis from First Street Foundation suggests that 3.2 million Americans have already relocated from areas with high flood risk. As extreme weather events become more frequent and severe, and as Southern cities become hotter, New America estimates that 20 million Americans will relocate by 2100. 

As Americans move, however, many are relocating to nearby communities that are often no less vulnerable than the ones they had left. A report from Rice University on government buyouts of flood-prone houses, for example, found that 58 percent of participating homeowners relocated within a 10-mile drive of their previous property. And, even as some Americans are leaving the Sun Belt, others are continuing to move there. Census Bureau data from 2023 shows that 11 of the 15 fastest-growing cities in the U.S. are located in Arizona, Texas, and Florida: states at increasing risk of various natural hazards, including sea-level rise, extreme heat, drought, flooding, and tropical storms.

Alongside negative effects on physical safety and quality of life, decisions to remain in geographically vulnerable areas have major economic consequences for residents, local and state governments, and the federal government. Residents and local governments risk hundreds of billions of dollars in financial losses from property damage and lost local tax revenues. State and regional actors increase the fallout of an all-but-certain collapse of real estate, mortgage lending, and homeowners insurance markets. Additionally, the federal government faces multi-billion dollar losses each year from post-disaster assistance payouts and from administering the already-insolvent National Flood Insurance Program. 

In order to minimize these losses, the U.S. must support the steady relocation of American households to more geographically resilient regions, including the Midwest, Northeast, and the northern Great Plains. And it must ensure that “Receiving Cities” in these regions have the housing and infrastructure to support and benefit from population inflows – just as Sun Belt metros have over the last half century – without displacing existing residents.

An Opportunity for Receiving Cities 

For many Receiving Cities, transplants from the Sun Belt and elsewhere offer a chance for socioeconomic revitalization and growth. Population increases can boost demand for goods and services, fill gaps in the local labor market, and increase the municipal tax base. Transplants will bring a diverse range of professional experience, skills, and educational backgrounds that can complement the existing workforce within their new community.

But without additional investment, many of these cities are unprepared to absorb population inflows. Post-industrial cities in the Midwest and Northeast theoretically possess the urban carrying capacity to accommodate new residents, but have persistently underinvested in housing, along with other community needs. For instance, Detroit, with its thousands of vacant and abandoned buildings, was actually short 24,000 habitable homes after blight was taken into account, according to a 2020 study from the University of Michigan. Similarly, a 2022 report from Duluth, Minnesota, often cited as the most geographically resilient city in the U.S., shows that the community requires 2,400 additional units to keep pace with its current rate of growth.

Consequently, the rapid and unplanned arrival of transplants in receiving cities could possibly overwhelm a local housing sector, exacerbate unaffordability, displacement, and homelessness, and place additional stress on rental and homeowner assistance programs, legal aid clinics, and other housing-related services. Recent experience in Chico, California is emblematic: following sudden population growth due to the 2018 Camp Fire, housing prices in Chico increased 21 percent while many Housing Choice Voucher beneficiaries struggled to find rentals. Smaller and mid-sized municipalities can especially struggle with the abrupt arrival of many displaced persons or transplants. A shortfall of financial and technical resources creates barriers to preparedness, and many local governments do not possess the staffing and expertise to access the federal funding and professional assistance that is crucial for planning.

Access to affordable and quality housing will be foundational for any successful revitalization or growth. Through a Receiving Cities Housing Program, the U.S. government can support future receiving cities to prepare local housing markets for expected population increases due to weather change. As this population movement is not presently occurring en masse, there is opportunity for the incoming administration to (i) help increase the preparedness and socioeconomic appeal of future receiving cities, in large part through production and preservation of affordable housing; and then (ii) encourage and support American households in relocating in the near future to receiving cities, in order to increase individual, community, and national resilience.

Burdens for unprepared communities

Although out of scope for this memo, it is worth mentioning that without proper planning, large population inflows could also place increased strain on existing infrastructure and public services in receiving communities, including health care, transportation, education, water and sanitation, electricity, and waste management. Unprepared localities may experience new or additional challenges in basic amenity provision, service disruptions, and/or increased cost of living for both newcomers and long-time residents as a result.

Plan of Action

Upon taking office, the President should sign an Executive Order to boost housing supply nationwide, with a focus on housing supply in Receiving Cities via a Receiving Cities Housing Program. The Executive Order will establish an Interagency Policy Committee (IPC) focused on housing risk reduction in Receiving Cities, stewarded by the Domestic Policy Council or the National Economic Council.

In parallel, the new administration must work to frame domestic relocation and the Receiving Cities Housing Program as an opportunity instead of a crisis or burden. American viewpoints are evolving on weather and disaster-related relocation, previously a political and social “third rail.” A 2021 survey found that 57 percent of participants believed climate change will force them to consider a move in the next decade. According to a similar survey from the real estate firm Redfin in 2021, nearly half of respondents that planned to relocate in the next year cited climate change as a deciding factor. 

To further depoliticize weather-related migration, the President should publicly position extreme weather as a risk to be managed similar to cyber risk and national security risk. He could do so in a speech to the American people and to Congress, such as the 2025 State of the Union. The President can also direct their Communications Director and Press Secretary, along with relevant agencies such as the Federal Emergency Management Agency (FEMA) and the Department of Housing and Urban Development (HUD), to communicate on the risks to households of remaining in vulnerable regions, and of the Receiving Cities Housing Program as a tool for revitalization and economic growth.

Overall, the Receiving Cities Housing Program should be guided by the following recommendations:

Recommendation 1. Expand federally supported research and data collection on geographic resilience, weather-related migration projections, and urban carrying capacity to inform designation of “Receiving Cities.”

Improved understanding of (i) geographic resilience; (ii) likely domestic weather-related relocation patterns; and (iii) urban carrying capacity is essential for informed and data-driven decision-making regarding the designation of “Receiving Cities.” The Executive Order should: 

Recommendation 2. Designate a set of “Receiving Cities” based on clearly articulated criteria and in consultation with prospective Receiving Cities.

The Receiving Cities Housing Program must consider geographic resilience, projected demographic growth, and urban carrying capacity (including potential carrying capacity of adjacent federal lands) during its selection process. Criteria should include a desire from the Receiving City to be included in the program. In order to ensure buy-in, potential Receiving Cities should also tangibly demonstrate a long-term commitment to affordable housing development, resilient urban planning, and socioeconomic equity amid weather-related migration. The IPC should develop and announce a set of measurable housing-related preconditions for designation of a city as a “Receiving City.” Program requirements could include, but is not limited to:

Recommendation 3. Develop a Receiving Cities Housing Program that supports production and preservation of affordable housing in designated “Receiving Cities.”

Once the Receiving Cities Housing Program selects participant cities, it must support these communities to (a) build new units, via a New Home Program, and (b) rehabilitate and preserve existing units, via a Home Restoration Program.

The Receiving Cities New Homes Program will include the following assistance:

The Receiving Cities Home Restoration Program will be responsible for making older and vacant homes market-ready, and will include the following assistance:

Recommendation 4. Secure long-term federal financing for the Receiving Cities Housing Program.

Major legislation such as the American Rescue Plan Act, the Infrastructure Investment and Jobs Act (IIJA), and the Inflation Reduction Act (IRA) demonstrate that the federal government can direct significant and flexible resources towards adaptation and resilience. Prioritization of these needs must continue via the Receiving Cities Housing Program, as effective preparation in receiving cities for weather-related migration is a long-term effort.

Concurrently, IPC member agencies should coordinate with relevant federal financing departments, agencies, and offices to increase funding for the production and preservation of affordable housing in designated “Receiving Cities,” with the following actions:

Recommendation 5. Create a pilot program that offers incentives for American households to relocate from high-risk areas to “Receiving Cities.”

As a supplement to the Receiving Cities Housing Program, HUD, in collaboration with FEMA and DOT, should pilot a resilient relocation program that provides tax breaks, housing vouchers, and/or direct payouts for households to relocate to Receiving Cities. The pilot could also incorporate workforce training or reskilling programs. 

At the local, state, and federal level, there are existing programs that provide incentives or support for people to relocate, such as Tulsa Remote; the ThinkVermont Innovation Initiative; and the Biden Administration’s recently established WelcomeCorps. A similar federal initiative for weather-related migration should leverage knowledge and expertise from existing programs. 

Conclusion

Led by the incoming administration, a new Receiving Cities Housing Program should incorporate a whole-of-government approach and emphasize coordination with local leaders, civil society, and the private sector. Implementation of this program will help provide projected receiving cities with increased resources to plan for and receive new arrivals, and also ensure that relocation to geographically resilient regions is a logical and appealing choice for Americans voluntarily relocating in part or whole due to weather.

Ultimately, with sufficient planning, technical assistance, resource allocation, and communications, the federal government can shape weather-related migration into an opportunity for economic revitalization and growth in geographically resilient communities, and also ensure equitable and high quality-of-life for both new arrival and long-time residents.

This action-ready policy memo is part of Day One 2025 — our effort to bring forward bold policy ideas, grounded in science and evidence, that can tackle the country’s biggest challenges and bring us closer to the prosperous, equitable and safe future that we all hope for whoever takes office in 2025 and beyond.

PLEASE NOTE (February 2025): Since publication several government websites have been taken offline. We apologize for any broken links to once accessible public data.

Frequently Asked Questions
What is a receiving community?

Broadly, a “receiving community” is any U.S. community that receives an influx of new residents due to weather-related migration. Some receiving communities are labeled as “geographically resilient,” which means that they are towns and cities in relatively less geographically vulnerable parts of the U.S.

When will most weather-related transplants move?

Despite broad consensus that climate change will result in greater displacement and migration in the U.S., it is difficult to determine a “tipping point” for very large population movements. Several scholars and journalists believe that the indirect economic impacts of natural disasters will spur a mass movement. Within this century, negative effects on sectors such as construction and real estate, manufacturing, tourism and recreation, and agriculture could lead to economic downturns, job loss, and then migration. At the same time, in many geographically vulnerable regions, the lack of access to traditional 30-year mortgages, increasingly unaffordable or unavailable homeowners insurance, or unsustainable repair costs following repeat disasters may cause real estate prices to crash and convince Americans to relocate.

How many Americans will become weather-related transplants?

Estimates vary widely on the number of future weather-related transplants in the U.S., and are often contingent on specific geographies or natural hazards. Research from the University of Southern California, for example, projects that sea-level rise alone will displace 13 million people in the country by 2100. Another study suggests that one in 12 residents from the U.S. South will relocate towards California, the Rockies, or the Pacific Northwest. Yet another academic article predicts that geographically resilient cities in the Northwest and Northeast should expect to grow in population by roughly 10 percent. Findings from the First Street Foundation indicate that 3 million Americans have already relocated due to increased flooding and flood risk.


Larger estimates also exist: Tulane University professor Jesse Keenan has predicted that 50 million Americans could relocate due to climate change. Reporter Abrahm Lustgarten writes that as many as 1-in-2 Americans, or approximately 162 million people, could eventually move due to natural disasters and environmental degradation.

Why does the U.S. federal government need to designate “Receiving Cities?”

For the last several years, New America has studied the dynamics of domestic weather-related migration, including the reasons why so many Americans are actively moving into vulnerable areas and also why those displaced by natural hazards often relocate to communities no less vulnerable than the places left behind. In part, we discern an oversimplified narrative that presents coastal regions of the United States as dangerous and inland areas as safe. Yet, as the impact of Hurricane Helene in western North Carolina demonstrates, this misinformation has the potential to threaten the well-being of millions of Americans and hampers adaptation efforts. Instead of relying on the media, the real estate sector, and others to designate geographically resilient cities, the federal government and its partners must leverage the resources and expertise at their disposal to designate “receiving cities” through rigorous quantitative analysis.

The Supply-Side Tax Credit: A National Incentive to Reduce the Cost of Affordable Housing

Because affordable developers pay the same price for goods and services as market rate developers, the cost to build affordable housing continues to increase with market conditions, stunting projects and states’ attempt to meet their Regional Housing Needs Assessment goals. One way to address the cost of development is to incentivize manufacturers and consultants to reduce their upfront cost when working on, or supplying materials for, an affordable development. A supply-side tax credit (STC) could offer a tax incentive to material suppliers and professional service consultants that provide goods or services to affordable housing projects. 

If consultants and manufacturers are willing to reduce their upfront cost in exchange for a dollar-for-dollar tax credit, the cost of developing affordable projects would significantly decrease. Since the amount of tax credits required for a project to be financially feasible is determined by the cost of construction, also referred to as eligible basis, the reduction in hard and soft costs realized through the STC would reduce the amount of low-income housing tax credits needed for each project. This would increase the number of projects that could receive a low-income housing tax credit allocation annually. 

Allowing suppliers of affordable housing to claim a tax credit in their annual tax filings would reduce their corporate or individual tax liability, thereby immediately passing savings through to the affordable developer. The table applies a 30% Supply-Side Tax Credit to hard and soft costs of a recent project. In this scenario, the affordable developer will see $4.44 million in project savings. 

Consultant/ManufacturerPricePrice ReductionTax Credits Earned
General Contractor$12 million30%$3.6 million
Architect$2 million30%$600,000
Engineers$800,00030%$240,000
Total$4.44 million

When the affordable developer requests bids for services or construction of the project, notice will be provided in the Request for Proposals/Qualifications that if the manufacturer or consultant reduces their cost by 30%, they will receive a Supply Side Tax Credit Reservation when the project is awarded either 4% or 9% Low-Income Housing Tax Credits (LIHTC). The reservation of the LIHTC will simultaneously secure the manufacturer and consultant’s STC until the following tax period. 

The STC differs from the LIHTC in that it is not an equity investment in the project but rather a tax incentive for suppliers of affordable housing. The STC also differs in that LIHTCs are earned over a 15-year period, and the STC is earned in the tax year the tax credit reservation is made. This timing allows suppliers to realize the tax benefits as soon as possible since a large portion of consultant costs are incurred well before a tax credit allocation. Because this is a new tax credit, it will be independent of the federal per capita-based LIHTC credit cap. The STC will also reduce the amount of LIHTC credits needed to make a project feasible through a reduction in overall costs. Therefore, implementation of STC would increase the number of projects LIHTC could fund. Administration of this tax credit would fall under the state agency that currently administers the LIHTC program. 

Because the STC reduces corporate or individual tax liability, efficacy of the program may be reduced should the allocation of credits exceed a manufacturer’s or consultant’s tax liability. Therefore, the reduction in tax liability may be structured as a 30% reduction, rather than a dollar-for-dollar reduction in tax liability. 

State-level support for a Supply-Side Tax Credit may be found in advocacy organizations in the affordable housing arena, like the Non-Profit Housing Association of Northern California, California Housing Partnership, East Bay Housing Associations, California Coalition for Rural Housing, and others. This proposal could be made to the California State Treasurer’s Office, which administers both the 4% and 9% tax credit programs.

Federal support may be found in federal advocacy organizations like the Grounded Solutions Network, the National Housing Conference, and the National Association of Housing and Redevelopment. Political support may be found in the Senate Finance Committee, which proposed the Workforce Housing Tax Credit Act, also known as the Middle-Income Housing Tax Credit, to both houses of Congress to build more middle-income housing. 

With the assistance of Congress in drafting and proposing the Supply Side Tax Credit to the Senate Finance Committee and working with the California Tax Credit Allocation Committee and the California Debt Limit Allocation Committee to draft and issue program guidelines for the administration of the credit, we may get closer to solving this crisis. To draft the legislation itself could cost an estimated $150,000 in legal and financial advisor fees and $25,000 for lobbying and advertisement. This $175,000 cost can be raised through a capital campaign to organizations like Enterprise Community Partners that works with nonprofits to push policy change, along with support from the California Community Foundation that provides grants for long-term systematic solutions to the housing crisis in Los Angeles, as well as the grants from the San Francisco Foundation, and the Local Initiative Support Corporation. All of these organizations have the capacity to grant such an award and interest in making affordable housing less costly. This $175,000 cost would be reimbursed on the first deal that utilizes the STC. Additionally, money would naturally be saved long-term by reducing the upfront cost to build and by freeing up additional Low Income Housing Tax Credits due to the reduced cost and thus reduced tax credits needed on each Supply-Side Tax Credit deal. 

The STC offers a new way to help control the rising cost of building the affordable housing this nation desperately needs.

This idea of merit originated from our Housing Ideas Challenge, in partnership with Learning Collider, National Zoning Atlas, and Cornell’s Legal Constructs Lab. Find additional ideas to address the housing shortage here.

Develop a Housing Production Dashboard to Aid Policymaking and Research

Anyone who wants to understand housing production and its barriers faces crucial information gaps. Legislators, planners, housing developers, researchers, advocates, and citizens alike struggle to track proposed and actual housing production in a community or across communities, understand why proposed units go unconstructed, or determine affordability levels of proposed or approved units. Absent this information, the efficacy of interventions, including zoning reforms, is purely speculative, potentially resulting in inefficient, ineffective, or inequitable policies.

The Department of Housing and Urban Development (HUD), Department of Commerce, and Department of Transportation should jointly develop and manage a data resource—a Housing Production Dashboard—to track housing production within and across states and local jurisdictions to inform policy and research and to ensure that public investments in affordable housing production and preservation are made with maximum efficiency.

There is broad consensus that addressing chronic housing undersupply requires governments to ease constraints on housing production through zoning, finance, and other reforms. Our highly localized and decentralized land-use permitting system, the uniqueness of each local code and processes, and the idiosyncratic nature of local permitting administration obscures this information. Even as states and cities have adopted reforms such as allowing multiple units on single-family residential lots, there is little indication that single-family zoning caused unaffordable housing or that amending it will effectively address the problem.

No federal or state rule requires, and few agencies have developed, methods to track housing production despite this information’s relevance to fair and affordable housing, economic development, and transportation agencies. The few existing resources include the Federal Reserve Bank of Minneapolis’s Housing Indicators website and California’s Statewide Housing Plan Dashboard.

Recommendation

To make housing production data generally available to government agencies, policymakers, researchers, and citizens, we recommend the following: 

This data resource will facilitate affordable housing production by (1) enabling policymakers and researchers to compare jurisdictions’ regulations and processes, and the reasons housing units go unconstructed, to identify causes of underproduction; (2) substantiating fact-based development decisions by local and state policymakers and reducing the power of anti-development-motivated reasoning; (3) empowering advocates and citizens to apply political and legal pressure on officials that fail to address housing needs or concentrate affordable housing in low-opportunity areas; and (4) informing real estate industry and major employer investment and location decisions prioritizing the most advantageous communities in which to locate and build more housing.

The federal government has a precedent and expertise in providing this type of data through HUD’s CHAS and AFFH Data and Mapping tool, as well as numerous Census products. Federal agencies are best-positioned to incentivize data delivery for the Dashboard and ensure the provision of unbiased factual information. Academic institutions and advocacy nonprofits could partner in the product’s development through a federal request for proposals. In summary, the Dashboard presents an opportunity for more informed policymaking, better economic development, and a powerful public information resource, with particular benefit for small and budget-constrained localities, advocates, and builders without the resources to collect and analyze the data on their own.

This idea of merit originated from our Housing Ideas Challenge, in partnership with Learning Collider, National Zoning Atlas, and Cornell’s Legal Constructs Lab. Find additional ideas to address the housing shortage here.

Exempt Affordable Housing from Private Activity Bond Volume Cap

Tax-exempt Private Activity Bonds (PABs) are one of the primary financial tools to build and preserve affordable housing as they generate as-of-right Low-Income Housing Tax Credits (LIHTC). However, the federal cap on those bonds creates a significant barrier to expanding overall affordable housing supply. By exempting affordable housing from the state volume cap, we can build more housing in states that are fully utilizing their volume cap. 

The Housing Shortage Drives Up the Cost of Rental Housing 

The United States faces a severe housing affordability crisis due to a shortage in housing supply that has been exacerbated by the pandemic. This shortage places pressure on households across the housing market but disproportionately impacts low-income households. The National Low 

Income Housing Coalition found a shortage of over eight million homes affordable to very low-income households, those at or below 50% of the area median income (AMI). In New York State, this shortage is over 712,000 homes, contributing to soaring rents and a homelessness emergency. A renter in New York State needs to make over $40 per hour to afford a two-bedroom apartment at fair market rent as determined by the Department of Housing and Urban Development (HUD). In New York City and the surrounding suburbs, they would need to make over $47 per hour.

In a growing number of states, low-income renters are being priced out of the market with few housing options, forced to pay a large portion of their income towards housing costs and/or living in substandard housing. As renters compete for limited housing options, rent prices increase as a result of this demand. 

Tax-Exempt Private Activity Bonds Fuel Affordable Housing Production and the Economy 

LIHTC is the single largest and most significant tool to finance affordable housing and often works with tax-exempt PABs. Tax-exempt PABs are state and local bonds for certain “qualified private activities” that exempt the interest earned by holders from federal income taxes. When they are used to finance at least 50% of an affordable rental housing project – a requirement referred to as the “50% test” – they come with as-of-right LIHTC. This provides equity for the development and preservation of affordable housing for low-income households. These federal tax credits leverage additional project funding, including a commercial mortgage, and often other state or local subsidies. At marginal expense to the federal government, PABs boost our country’s housing stock while also creating thousands of jobs and generating new tax revenue and billions in economic spending – in the process shortening economic crises and reducing their severity. 

LIHTC generated by PABs help finance most new low-income housing and are critical to meeting affordable housing supply needs. They produce affordable housing that serves incomes from 30 to 80% of AMI, with all LIHTC units in a development averaging at 60% AMI. Since its creation in 1986, the program overall has developed or preserved almost four million homes, generated $257 billion in tax revenue and over $716 billion in wages and business income.

Volume Cap Is a Financing Barrier to Expanding Affordable Housing Supply 

Unfortunately, PABS are a finite resource, artificially limited by the federal “volume cap,” which limits the number of tax-exempt private activity bonds each state can issue. The volume cap was imposed as part of a larger effort to restrict the supply and demand for PABs through the Tax Reform Act of 1986. These restrictions were primarily intended to address concerns around cost and tax equity. 

Every year, a new cap is allocated to each state based on population using a formula set by Congress. New volume cap that is not used by the end of the year may be carried forward for three years. New York already uses all its cap on affordable housing, financing the creation or preservation of about 10,000 units of affordable housing annually. Demand for additional volume cap is great, outstripping supply. As a result, some shovel-ready projects must wait three or more years before receiving financing, a significant delay that deters affordable housing development. 

Volume cap allocation has not kept pace with the growing demand for affordable housing, increasing just 25% over the past decade, even as the nation produced 5.5 million fewer homes in the last 20 years than it did in the previous 20. Meanwhile, construction costs have skyrocketed. The cost of building materials increased over 20% in just one year in 2022, and developers have seen insurance rates double and triple over the past five years.

While PABs have several uses, most recent analysis shows 88% of issuances in 2020 went to multi- and single-family housing, continuing an upward trend of almost a decade, most of which is attributed to the increased demand for affordable rental housing. Nationally, the total amount of multifamily bonds issuances nearly doubled in only a few years from $7.2 billion in 2017 to over $13 billion in 2020. The number of apartments expected to be built from PABs increased by almost 20% from 2019 to 2020. 

Further, as communities across the country face housing supply shortages, more states are reaching their maximum allowable PAB issuance. In 2019 and 2020, states like Maine, North Carolina, South Carolina, Utah, and Montana issued record levels of PABs for housing. One in three states have reached their volume cap in recent years, including California, Georgia, Kansas, Maryland, Massachusetts, Minnesota, Nebraska, New York, New Mexico, Nevada, North Dakota, Oregon, Rhode Island, Texas, Tennessee, Utah, Washington, and Washington DC. Further, the Infrastructure Investment and Jobs Act (IIJA) created two additional uses for PABs – broadband projects and carbon capture facilities – that could compete with housing for usage.

Volume Cap Exemptions Help Achieve the Public Good 

There have been exceptions to state volume cap for 17 activities that contribute to the public good. These exceptions allow localities to build critical infrastructure without taking tax-exempt bonds away from other purposes. Congress has structured these exceptions in multiple ways. For example:

  1. Large public infrastructure such as airports, docks and wharves are exempt from volume cap.
  2. To address mounting capital needs for school construction and repair, Congress established a separate cap for financing some public educational facilities. 
  3. The 2004 American Jobs Creation Act authorized $2 billion in tax-exempt bonds not subject to volume cap for qualified green building projects.
  4. Congress authorized $15 billion in tax-exempt bonds not subject to volume cap for highway and surface freight transfer facilities to address challenges in our transportation systems. 
  5. For three uses, only 25% of bonds contribute to the cap. This includes high-speed intercity rail facilities, private projects to expand broadband access to underserved areas and facilities that capture carbon dioxide from the air.

Legislative Recommendations 

Given the scale and urgency of the housing affordability crisis and the precedent for volume cap exemptions to address public priorities, we recommend that Congress enact legislation to exempt the development and preservation of multifamily rental housing affordable to low income-households from state volume cap. 

There is political will to address the supply shortage. Recent increases in the HUD budget are helpful, but a significant HUD expansion to address our supply shortage will likely not gain congressional support in the immediate future, and the discretionary budget is constrained by the debt ceiling agreement. 

We believe a tax-side solution is possible. LIHTC has enjoyed bipartisan support and legislation to meaningfully expand it, the Affordable Housing Credit Improvement Act (AHCIA), has bipartisan co-sponsors in both the House and Senate. There are several tax side proposals to allow more efficient uses of PABs that would produce meaningful increases in supply. The SAVE Act would create an exception to volume cap for the preservation, improvement, or replacement of federally assisted buildings to aid public and other HUD-assisted housing. The “50% test” unnecessarily limits volume cap as projects often have to allocate more bonds than are needed to finance the project to meet this requirement. The AHCIA would decrease the percentage of bond financing required to generate LIHTC from 50% to 25%, freeing up volume cap for states. However, exempting affordable housing from volume caps would address the underlying issue and have the greatest impact in this housing emergency. 

There is also opportunity to provide volume cap relief through tax extenders or “must pass” bills that maintain government funding. Tax changes are often attached to broader bills. For example, we saw changes to LIHTC in the 2015 Protecting Americans from Tax Hikes Act, the 2018 omnibus spending bill, and the Consolidated Appropriations Act of 2021. 

Even though LIHTC expansion has bipartisan support, the cost to the federal government from increased use of tax credits is a challenge. To limit or offset the costs of the tax credit (which is quantified by a reduction in future tax revenue, not direct federal spending), there are two options: (1) limit the exemption for a 10-year period, or (2) tie the exemption to revenue-generating reforms that are proven to add to the tax base, such as requiring state or local action on removing zoning barriers to access the state volume cap exemption for affordable housing. There has been no analysis on the cost of a complete exemption from volume cap, but AHCIA provisions to reduce the 50% test and expand LIHTC included in an early version of Build Back Better were estimated to cost about $12.7 billion in reduced revenue over 10 years. That investment, a small percentage of the $1.75 trillion proposal, could have housed 1.9 million low-income people while generating more than 1.2 million jobs, $137 billion in wages and business income, and more than $47 billion in tax revenue. 

The housing shortage is an emergency affecting the lives of millions of Americans and the stability of our communities. Affordable housing is a public good, and the federal government has an obligation to respond to the needs of millions of low-income Americans. Adding affordable housing to the list of PAB uses exempt from volume cap would allow localities to build and preserve more desperately needed affordable housing.

This idea of merit originated from our Housing Ideas Challenge, in partnership with Learning Collider, National Zoning Atlas, and Cornell’s Legal Constructs Lab. Find additional ideas to address the housing shortage here.

America Needs a National Housing Loss Rate

The need for a national housing loss rate 

Each year, an estimated 10 to 20 million Americans lose their homes through eviction and mortgage foreclosure, tax sales, eminent domain, post-disaster displacement, and other less-studied forms of housing loss. These destabilizing events lead to homelessness, job loss, adverse health impacts, and downward economic mobility. And yet, America neither tracks housing loss nor holds politicians and decision-makers accountable for keeping it low. There is no national database of evictions or foreclosures, and research from New America found that one in three U.S. counties have no available annual eviction figures. Without a clear picture of housing loss across the country, it is nearly impossible to pass data-driven policies that keep people housed. 

If the United States wants to get serious about stemming housing loss, then it should establish a national housing loss rate to stand alongside the national unemployment rate as a key indicator of social and economic well-being. The creation of a housing loss rate—a metric of how many people lose their homes involuntarily over a given period of time, and why—would help drive accountability and action among policymakers and improve resource allocation, regulation, and housing supply interventions. 

Recommendations 

We envision working on two parallel, mutually reinforcing tracks to establish home loss as a regularly tracked indicator, akin to the unemployment rate. The first track would employ a survey-based approach to establish a national housing loss rate, while the second, longer-term effort would build local infrastructure to collect and analyze data on actual incidences of housing loss. 

Congressional Action 

Congress should direct one of the lead federal housing agencies —  most likely the Consumer Financial Protection Bureau (CFPB), the Federal Housing Finance Agency (FHFA), or the Department of Housing and Urban Development (HUD) — in consultation with the others to produce a feasibility study of developing and deploying a nationally representative survey to measure housing loss. The feasibility study should assess the most promising data collection strategies, the body responsible for implementing this effort (and whether this effort should be hosted inside or outside of government), and methodological questions such as the desired frequency, geographic coverage, and scope of the survey. 

Executive Action 

Concurrently, HUD, FHFA, the CFPB and the Census Bureau should use their existing authority to assess the feasibility of including housing loss questions or modules into surveys over which they have jurisdiction. Surveys identified by experts as possible entry points include the Census Pulse Survey, the American Community Survey, the American Survey of Mortgage Borrowers, and the American Housing Survey. Where the insertion of questions is feasible, HUD and Census should work with housing experts to develop and pilot proposed questions. 

The Domestic Policy Council (DPC) should convene federal housing agencies to establish a comprehensive housing loss data collection, storage, and sharing strategy (including a plan for free, public access to the data in a way that also protects privacy) in consultation with housing advocates and academics. An interagency process to establish a national housing loss rate would be the strongest lever to achieve meaningful executive action. 

Finally, the Office of Management and Budget (OMB) should incorporate housing loss into its Life Experiences projects. The Customer Experience Executive Order, enacted in 2021, requires OMB to work with the DPC and the National Economic Council to study salient “life experiences” during which Americans interact with government services, in an effort to improve government efficiency. OMB should explore whether better tracking of housing loss could be incorporated into one of the existing projects—it is most relevant to facing a financial shock and recovering from a disaster—or whether housing loss could be the subject of its own life experience project. 

Conclusion 

Developing a national housing loss rate will take time and resources, and most likely will require congressional action and funding. A survey effort would likely need a time horizon of at least five years, and collecting and understanding actual incidences of housing loss will take significantly more time. However, as with the U.S. unemployment rate, which took decades to establish, the necessity of such a metric justifies the effort. A housing loss metric, if rigorous, regularly collected, and available at the national, state, and local level, would have profound impacts on our understanding of the causes and consequences of home loss and improve our ability to develop policies and programs that keep people more securely housed.

This idea of merit originated from our Housing Ideas Challenge, in partnership with Learning Collider, National Zoning Atlas, and Cornell’s Legal Constructs Lab. Find additional ideas to address the housing shortage here.

Increase Dedicated Resources for the National Housing Trust Fund

The United States faces a shortage of 7.3 million rental homes affordable and available to extremely low income (ELI) renters—those making at or below 30% of area median income (AMI). The private market does not build and operate housing affordable to renters in this income bracket on its own. Subsidies are necessary for landlords to charge rents that these households can afford. 

The National Housing Trust Fund (HTF) is targeted to increase the supply of ELI rental homes. Ninety percent of HTF dollars must be used for the production, preservation, rehabilitation, or operation of affordable rental housing, and at least 75% of these dollars must support housing that is affordable to ELI renters. By contrast, the nation’s largest housing production program—the Low Income Housing Tax Credit—primarily serves renters at 50-60% AMI. 

The HTF is currently funded with a small annual fee (0.042%) on Freddie Mac and Fannie Mae activity. States received their first HTF allocations in 2016, and approximately $3 billion has been allocated to date. The Department of Housing and Urban Development (HUD) administers the HTF as a block grant to housing finance agencies in all 50 states and U.S. territories, which create state-level Allocation Plans to determine how HTF dollars are awarded. HUD’s formula for distributing HTF dollars is based on (1) the number of renters making at or below 50% of AMI who are severely cost-burdened, meaning that they pay more than half their income on housing costs, and (2) the shortage of rental homes affordable and available to households making at or below 50% of AMI, with extra weight given to ELI households. 

To increase the supply of affordable homes, Congress should make greater investments in the HTF. Expanding the supply of homes affordable to ELI renters will also address the overall housing shortage. If millions of cost-burdened ELI renters could move into subsidized homes, more market-rate housing would become available to higher-income renters. 

Recommendations 

To avoid competition with other programs in HUD’s annual budget, the HTF is intended to be funded outside of the annual appropriations process. The Build Back Better package that passed the House of Representatives in 2021 included $15 billion for the HTF, but this provision was stripped out of the slimmed-down Inflation Reduction Act that Congress ultimately enacted. 

As a new source of revenue, Congress should reform the mortgage interest deduction (MID) to make second homes ineligible and invest the equivalent savings in tax expenditures into the HTF. While Congress reformed the MID in the 2017 Tax Cuts and Jobs Act, this legislation ignored years of bipartisan tax reform proposals that proposed to eliminate the MID for second homes. The proposal would face pushback from second homeowners, but research shows that it is politically popular and bipartisan: a 2012 Quinnipiac poll found that 55% of Democrats, 55% of Republicans, and 58% of independents supported this reform. Elimination of the MID for second homes could win cross-cutting support from deficit hawks seeking to cut back federal spending and progressives who favor federal support for people with the greatest needs. 

Conclusion 

On its own, the savings from eliminating the MID for second homes will not enable the HTF to entirely close the gap between housing supply and housing needs of the lowest-income renters. However, a substantial boost in resources would enable the HTF to make a greater dent in the housing shortage. 

More widespread impact would also make the HTF a more visible federal program, increase its constituency of supporters, and create the political will for even more dedicated funds in the future. 

This idea of merit originated from our Housing Ideas Challenge, in partnership with Learning Collider, National Zoning Atlas, and Cornell’s Legal Constructs Lab. Find additional ideas to address the housing shortage here.

Why Creating an FHA/VA Mortgage Program for Developers Is a Good Idea

Lack of affordable mortgage programs for small businesses and developers contributes to the housing shortage in the United States. Primarily, commercial lenders guarantee and fund mortgages for small businesses and developers. These loans, known as investor and commercial mortgages, are very restrictive, resulting in only small pools of qualified applicants. Creating a federally guaranteed investor mortgage combined with an optional construction loan will assemble a larger base of qualified borrowers financially positioned to purchase and build more housing inventory. 

Forming a federally backed investor mortgage and construction loan program does not require a large government expenditure initially. It only needs the full faith and promise of the United States government as a guarantee. Commercial banks could qualify the applicants and issue loans by utilizing existing systems servicing Fair Housing Authority (FHA) and Department of Veterans Affairs (VA) mortgage programs. The proposed program would be administered by the Department of Housing and Urban Development (HUD) and the VA, bypassing the need to create a new federal agency. 

Creating such a program, however, would require legislative authorization from Congress as it would expand the federal government’s role from guaranteeing primary residential mortgages. 

This proposed program would feature: 

The program differs from the FHA 203k product by not requiring the borrower to occupy the property as their primary residence and by permitting both renovation and construction on land purchases. 

A federally guaranteed investor mortgage program has many benefits. Having larger pools of qualified borrowers encourages the development of properties like duplexes, fourplexes, and other small apartment buildings in urban areas often overlooked by traditional developers. This not only promotes more infill development, it also addresses the important Missing Middle Housing concept by supplying more units at competitive rents for the middle-class workforce near their employment. Moreover, by using available local municipality initiatives, the owners could offer some or all their units at below market rents – potentially adding more affordable housing inventory as well. Finally, establishing larger pools of qualified borrowers provides developers of different races, genders, and ethnicities more opportunities to create generational wealth through a proven source: real estate. 

The main argument against creating a federally guaranteed investor mortgage is the elevated risk of borrower default. While this concern is valid, there are several layers of protection built in to mitigate it. For example, the full recourse requirement ensures all borrowers’ assets are subject to government ownership to offset the default risk. Second, requiring a mortgage insurance fee along with the monthly mortgage payment for the loan term supplies additional funds to the federal government, reducing the risk. Limiting construction loans to 80% of the completed project’s appraised value provides a financial buffer. Last, in addition to meeting all the loan conditions, borrowers would be required to submit a detailed operational business plan for final approval. 

While federally backed loan programs to purchase and build housing units already exist, they are designed primarily for larger projects. There are no federally guaranteed mortgage and construction programs designed for small businesses and developers doing small projects. Omitting this category threatens to restrict the potential development of housing inventory critically needed throughout the United States. To help boost the supply of housing, a federally guaranteed mortgage and construction program for small developers should be created.     

This idea of merit originated from our Housing Ideas Challenge, in partnership with Learning Collider, National Zoning Atlas, and Cornell’s Legal Constructs Lab. Find additional ideas to address the housing shortage here.

Accelerating Affordable Housing Through Market-Based Incentives

The lack of affordable housing supply in high-opportunity metro regions impedes equitable economic growth. According to a study published in the American Economic Review, the misallocation of labor as a result of housing constraints has led to a 36% reduction in aggregate U.S. economic growth. Meanwhile, new market-rate construction often faces arduous permitting processes from local governments. This proposal would accelerate affordable development by granting permitting incentives to qualified projects, allocating rewards through a competitive bidding process favoring the most impactful proposals. 

Under this system designed by the Department of Housing and Urban Development (HUD), developers would obtain credits to bid on packages of permitting privileges based on voluntarily incorporating enhanced affordability into their projects. Deeper affordability milestones would garner exponentially more credits to steer resources toward greatest needs. Additional credits would be awarded for proposals in regions facing urgent supply shortages. Developers could then leverage credits to bid on incentive packages in allocation auctions administered by HUD. 

Incentives would include expedited reviews, waived fees, dedicated staff coordination, and density bonuses. While incentives are standardized federally, execution taps local jurisdiction staff funded by federal grants. HUD would disperse formula or competitive grants to municipal governments that elect to participate and hit prescribed targets. Codifying terms upfront attracts municipality buy-in and reduces the barrier of negotiating one-off municipality agreements. Instead localities can opt in to a pre-set federal program with funding levels and metrics already defined. By financing the supplemental staff capacity needed for faster reviews, this streamlined approach creates the right supporting conditions to accelerate affordable housing approvals. 

To maximize the allocative efficiency of the program, robust targeting based on affordability and project urgency due to the disproportionate need for deeply affordable units in high demand metropolitan areas would be incorporated rather than a pure lottery. Some ways to achieve this: 

This retains market incentives while steering resources toward most impactful projects. 

An additional component would enable developers to trade their credits, optimizing incentive opportunities across regions when buying and selling credits. The tradeable tickets create a secondary market where developers can buy/sell eligibility to optimize incentive opportunities across regions based on their risk tolerance. For example, a large developer could acquire credits from several small projects to boost their chances of winning desirable incentives. Or developers could sell a portion of their credits to investors to finance projects while still participating in auctions. This flexibility and liquidity attracts broader private sector participation to expand affordable supply. 

The full policy is novel, but elements like expedited permitting, fee waivers, and tax incentives have successfully boosted affordable housing in some states. For example, Massachusetts uses local option property tax exemptions. Combining tailored incentives with market mechanisms provides a new model. 

Legislative Recommendations

Congress should pass legislation with bipartisan sponsorship authorizing HUD to:

Executive Recommendations 

HUD would administer the program design and auctions in phases: 

HUD would compile and maintain a centralized database of zoning codes, public land holdings, and other housing development variables. 

The White House Office of Management and Budget (OMB) would coordinate interagency efforts around alignment with the Department of Transportation, the Treasury Department, and other agency incentives like tax credits. Savings from streamlining bureaucracy and increased tax revenue as a result of improved economic growth could offset a substantial share of costs for the program. With strong bipartisan appeal, funds could be pulled from the Infrastructure Investment and Jobs Act (IIJA). 

This proposal has the power to cultivate an ecosystem of incentives where developers compete to deliver public goods. Market dynamics drive outcomes, overcoming constraints on equitable growth while working through local partners. Using incentives over mandates minimizes political opposition as cities chip away at large affordable housing deficits to promote inclusive prosperity.

This idea of merit originated from our Housing Ideas Challenge, in partnership with Learning Collider, National Zoning Atlas, and Cornell’s Legal Constructs Lab. Find additional ideas to address the housing shortage here.