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:
- Solve the U.S. housing shortage faster and more cost effectively, and
- 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:
- Where: homes in connected, lower-hazard established neighborhoods with access to jobs and services.
- What: home types that more people can afford, including accessory dwelling units (ADUs), townhomes, duplexes, fourplexes, sixplexes, apartments, single-family starter homes, and manufactured homes.
- How: homes that are better able to withstand disaster, have lower utility costs, reduce pollution, and strengthen the grid rather than strain it.
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:
- Cut red tape specifically to allow homes of all shapes and sizes in connected, lower-hazard established neighborhoods.
- Put public land in lower-hazard established neighborhoods to work.
- Simplify public financing so dollars for income-restricted housing and starter homes go further.
- Make disaster-prepared construction the norm.
- Build lower utility costs into new homes from the start and make homes critical energy infrastructure.
- 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
America’s affordability problem is bigger than home prices and rents. The best housing policies make it easier to build homes, and 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.
FAS has partnered with ICLEI USA to launch the CRI Local Advisory Council.
We sat down with Dr. Max Moritz and Chief Rob Hazard to discuss how communities use time, money, and data to reduce the risk that wildfires pose.