The James Madison Institute (JMI) has released an extensive report on Florida’s housing affordability crisis.
problem? “Rising house prices and rising rents are due to inventory shortages,” the report explains.
According to the JMI report, home prices have soared 60% since 2019, while existing home sales have fallen to their lowest level in 30 years.
Root causes of the housing crisis
According to JMI, there are several reasons for this.
Restrictive land-use regulations, domestic supply chains, inflationary pressures, and tax and insurance structures rather than investor activity.
“Regulations often limit the type and density of housing that can be built, leading developers to seek larger and more expensive housing, limiting supply and increasing prices,” the report said.
Additionally, permitting and other regulatory hurdles can slow the construction process, delaying or completely blocking the construction of starter homes, making them less attractive to developers.
JMI also notes that higher interest rates and higher insurance premiums will make it more expensive to buy a home, while population growth and migration to high-demand cities will increase competition, further exacerbating the problem.
Single family rental.
JMI addressed this issue by emphasizing the role of institutional investors, showing that institutional investors (Wall Street) are only a small part of the overall housing market and that housing supply constraints are the main driver of rising costs.
Housing affordability, supply constraints, and investor debates
The report says limited inventory and rising home prices are increasing pressure on housing affordability across U.S. states, making homeownership increasingly out of reach for many families.
JMI policy analyst Doug Wheeler says legislative and policy frameworks should focus on increasing housing supply by improving regulatory systems that hinder development and encouraging private investment, rather than investor caps, taxes, and regulations that inevitably result in limited housing options.
Policy pathways to expanding housing supply: A supply-focused framework
JMI’s report details how housing affordability can be addressed and how it should be done through a supply-led approach.
Policymakers seeking meaningful progress need to focus on expanding production, reducing regulatory friction, and diversifying housing types, including single-family rentals (SFRs) and rental housing communities. “This can be accomplished by streamlining the permitting process, addressing zoning restrictions, and expanding the types of housing allowed to include single-family rental and construction projects,” JMI said.
