Up for Growth 2022 Housing Underproduction in the U.S. Report Finds Nation’s Housing Deficit Has More Than Doubled Since 2012

First-of-its kind report quantifies housing shortages at the regional housing market level, finds underproduction reached 3.8 million homes in 2019, up from 1.6 million in 2012

May 16, 2022 | Up for Growth
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Washington, DCUp for Growth, a cross-sector member network committed to solving the nation’s housing shortage and affordability crisis through data-driven research and evidence-based policy, today released its groundbreaking report, Housing Underproduction in the U.S., a first-of-its-kind longitudinal study tracking nationwide housing underproduction by state and across 814 regional markets – the most detailed analysis of American’s housing shortage ever produced.

By measuring the gap between the number of homes available versus those needed, Up for Growth identified a housing deficit in 47 states and the District of Columbia, and 169 metropolitan areas – finding that housing underproduction in the U.S. reached 3.8 million homes in 2019, up from 1.6 million in 2012.

“With the nation 3.8 million homes short of meeting housing needs, the U.S. is in an extreme state of housing underproduction,” said Mike Kingsella, Chief Executive Officer of Up for Growth. “Housing affordability is foundational for building and sustaining healthy local economies, and provides individuals and families with the stability necessary to invest in themselves and their communities. The Housing Underproduction report offers policymakers solutions to help create more homes while also improving equity, community resilience, and addressing drivers of climate change. It is vital that we act now to address America’s most urgent economic, environmental and social equity crisis.”

“Our nation faces a severe housing affordability crisis that urgently requires investment in housing supply with an eye toward eliminating longstanding barriers to housing opportunity for underserved communities, said Julián Castro, former United States Secretary of Housing and Urban Development from 2014-2017. “Up for Growth’s new report, Housing Underproduction in the US, is a must-read for policymakers and advocates who seek to address this challenge effectively.”

"The acute shortage of homes, both for rent and sale, is the main driver of today’s housing affordability crisis. Up for Growth’s report is a major contribution to our understanding of the full dimensions of the mismatch between housing supply and demand,” said Pamela Hughes Patenaude, former United States Deputy Secretary of Housing and Urban Development (2017 – 2019). “The report will be an invaluable resource to policymakers at all levels of government as they seek to help boost housing production and improve housing affordability.”

To generate highly accurate findings, Up for Growth researchers modeled housing data from 2,351 U.S. Census Bureau geographies called Public Use Microdata Areas (PUMAs). They found not only a deepening housing crisis, but one that is also becoming more widespread, affecting urban, suburban, and rural areas, and profoundly impacting residents in nearly every state. Included in report findings were the following:

Among states
 

  • In 2012, the nation’s affordability problem appeared to be concentrated on the coasts and in the Southwest. Today, 47 states and the District of Columbia have seen underproduction rise over the past seven years. The average U.S. state had a housing deficit of 79,000 homes.
    • The state with the most severe housing gap was California with a shortage of 980,000 homes.
    • The state faring best was Mississippi with a shortage of just 1,000 homes.
       
  • States with the most severe housing underproduction were, in order of severity: California, Colorado, Utah, Oregon, Washington, Washington DC, Arizona, Minnesota, New Jersey, and Massachusetts.
    • New to the list since 2012 are six states: Nevada, Missouri, South Carolina, Rhode Island, Oklahoma, and Mississippi.
       
  • Georgia was the biggest mover – up to number 10 from number 30 in 2012.
    States with the most dramatic increase in housing underproduction since 2012 were Georgia, Arizona, Delaware, Arkansas, Ohio, Kentucky, Pennsylvania, Michigan, Florida, and Maine.
    • Vermont was the only state where underproduction improved.

“As communities in Ohio and throughout the country face affordable housing shortages, it’s more important than ever that Congress works to expand the supply of housing and increase affordability,” said U.S. Senator Portman (R-OH). “Especially in the face of rising costs stemming from the COVID-19 pandemic and stressors from raging inflation, finding affordable housing is a concern of many Americans. Expanding it should be a priority – one I will stayed focused on until the end of my term.”

“Up for Growth’s Housing Underproduction in the U.S. report shows that the country is facing a housing supply and affordability crisis – making it next to impossible for families in Massachusetts and around the country to buy their first homes or keep up with rising rent,” said U.S. Senator Elizabeth Warren (D-MA). “We need to rein in housing costs by funding the construction and rehabilitation of affordable homes, eliminating restrictive zoning practices, and loosening Wall Street’s grip on the housing market.” 

Among metropolitan areas
 

  • The housing gap affected 169 metropolitan areas in 2019, up from 100 in 2012.
  • The housing deficit became more severe in 230 cities in 2019 compared to 2012; only 25 metros experienced an improvement in underproduction, or a shrinking housing deficit, since 2012.
  • Metros with the most severe housing underproduction in 2019 were, in order of severity: Los Angeles, New York, Miami, Riverside (CA), Washington DC, Chicago, San Francisco, Phoenix, Atlanta and Philadelphia.

The report also includes a plan that quantifies the potential economic, fiscal, social and environmental benefits of building millions of new homes. A Better Foundation is Up for Growth’s new and innovative housing policy framework that can help policymakers craft tailored housing solutions to improve economic vibrancy and resiliency. Up for Growth data finds that building 3.8 million additional homes would provide the following benefits to:

Housing affordability

  • Building an additional 3.8 million homes reduces future price appreciation. For example, if California closed its housing gap, home prices and rents would grow 20% slower than if the status quo continued unchecked.
  • After 20 years, this would save U.S. households $117 billion – $46 billion to renters, and $71 billion to homeowners.
  • This would provide an average household savings of $3,000 per year.

The economy

  • The average cost of building according to the Better Foundation plan is 11% less than more of the same, resulting in $157 billion of reduced construction costs, driving broad affordability benefits.  After 30 years of production, A Better Foundation generates:
    • $209 billion more in U.S. GDP compared to more of the same.
    • $111 billion more in personal income compared to more of the same.

Fiscal conditions

  • Local jurisdictions will generate $7 billion in additional net revenue over 30 years under A Better Foundation as compared to more of the same.
  • After 30 years, A Better Foundation generates $4.4 billion more in federal revenue compared to more of the same.

The environment

  • A Better Foundation uses 28% of the land required to support a more of the same approach.
  • The location of the construction of 3.8 million units under A Better Foundation would reduce Vehicle Miles Traveled (VMT) by 15% compared to more of the same. This represents 7.7 billion fewer miles traveled annually at full buildout – a reduction per housing unit of five miles traveled per day.
  • The lower VMT associated with A Better Foundation reduces CO2 emissions. When translated to the social cost of carbon, this represents a reduction of $110 million annually at full buildout.

"This report shows with stark clarity that housing underproduction is undercutting the potential of our nation,”said David Williams, Up for Growth board member and Vice President at Lafayette Square. “Housing is not just about physical units. Thoughtful development can serve as a means to increase economic opportunity for millions of Americans across the country. Data like what's provided in the report can help local policymakers fix the problem, not just talk about it. This research gives us a pathway forward."

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Up for Growth® is a 501(c)(3) cross-sector member network committed to solving the housing shortage and affordability crisis through data-driven research and evidence-based policy.