The Truth About America’s Housing Crisis

By John F. Di Leo, Opinion Contributor

Among the key political issues of this election year is the challenge of affordable housing – not necessarily because it should be, but because the media say it is.

We have somewhere around 340 million people in our country. It’s difficult to get an exact number because of tens of millions of illegal aliens, but it’s a decent guess; twice as many as we had just 70 years ago.

Has available housing kept up with this huge increase?

If not – and it certainly hasn’t – then there’s the first and primary cause of housing unaffordability.
When demand goes up and supply can’t meet it, the price climbs. This is the case, no matter what the commodity is.

Since we don’t have a spike in native population growth (people are reproducing at lower rates than ever), virtually all this increase is caused by immigration, both legal and illegal.

If you want to solve the problem, the answer is simple: stop immigration, deport the illegals who are already here, and give the country a chance to catch up before you start allowing immigration again.

You can say “that’s not going to happen” – and you may be right – but that doesn’t change the fact that it’s the logical answer to the problem.

This will sound to some like it doesn’t make sense. “I’m not competing with illegal aliens for housing; they’re not buying the suburban four-bedroom houses that I’m looking for, so they can’t be affecting my price.” And the answer is, yes they do.

There are different classes of homes across America – government housing and government assisted housing – cheap, moderate and luxury apartments – cheap, moderate and luxury townhomes and condos – cheap, moderate and luxury houses. The more people there are competing for one of these classes creates pressure on the other classes nearby.

If millions of illegals are taking up the government subsidized housing, for example, the legal citizens who might have qualified for government subsidized housing won’t find any, and will have to spend more of their meager funds to rent non-subsidized apartments. Or think of the empty-nest retirees who’d love to sell their big houses and move into a nice apartment, but with apartment rates so high, they’re better off staying in their houses, which keeps those houses off the market for folks who need them.

Add any huge influx of people into any of these groups, and you cause a disruption across the board.

You would be surprised at how many:

-Seniors would like to sell their houses
-Apartment dwellers would like to buy new houses
-Young adults would like to move out of their parents’ houses
-Successful people would like to buy a second home where their kids live
-College grads would like to move from their old dorms into their first apartments
-Rural folks would like to move to the city
-City folks would like to move to the suburbs

Unlike most other countries, the United States has always been distinctive for our incredible mobility. Americans move across town and across the country – for job changes, lifestyle desires, climate preferences, tax friendliness. This distinct, American mobility is baked into our system, and our housing stock is a big part of that.

But this mobility requires the kind of powerful economic growth that America enjoyed for its first two hundred years. We need the lower class to be constantly shrinking, as people move up from poverty to the middle class and from the middle class to wealth.

As long as builders and developers can reasonably forecast such trends, they can build new housing to accommodate it. A new apartment complex here, a new single family home development there. A new multiuse skyscraper here, an office building or hotel converted into condos there.

The private sector should be able to adapt to these demographic changes. And it could. There should be no need for the government to get involved.

But having tens of millions of indigents – both legal and illegal – messes with that math. This massive underclass makes it infinitely more difficult for real estate investors to figure out what the market needs. We desperately need strong economic growth – particularly through the kind of manufacturing renaissance that President Trump ran on – to power the movement of people from being the kind of folks who can’t afford housing to being the kind of folks who can.

The housing market – just like so many other segments of our economy right now, from bars to schools, from hospitals to nursing homes – is in turmoil. Consider what societal issues are experiencing massive change, both over the past 50 years and, especially, over the past ten:

-People marrying much later, or never, or divorcing and becoming single again. This upsets the balance of people who want houses vs. apartments. Not just at one moment in time but permanently; it changes the percentage of the average person’s lifetime in which he or she will live in a house.
-People working remotely. This is incredibly new. Known but uncommon a decade ago, the government basically forced the business sector into accepting remote work as a norm in the spring of 2020, as a ridiculous over-reaction to Covid-19. While often a positive for the individual employee, this has been terribly disruptive to real estate. More people can live where they want to, regardless of where their employer is. More people than ever before can choose the climate they like, the tax structure they like, the kind of community they like. But this also caused:
-The collapse of commercial real estate and business travel. Three shocking transformations, really – from in-office employment to remote work, from in-person shopping to online shopping, and from business trips to Teams and Zoom conferences – went from gradual to hyperspeed in 2020, permanently changing the already cyclical environments of office buildings, hotels, and storefronts. Skyscrapers and strip malls all over the country have been sitting empty for years, as owners try to decide whether to knock them down or convert them into something else. Many hotels too, which used to be able to balance between personal/famiily travel on the weekends and business travel on weekdays, must now make their money on weekends alone like restaurants do. Could they be converted to housing? Sure… but what kind would be cost-effective and sensible as an investment – low-end apartments? Luxury condos? These conversions can be as expensive as building from scratch.

Now, let’s leave supply issues and cultural changes for a moment and consider other inputs to the prices of houses, condos and rental units:

-In many states, and especially in our big blue cities, fast-rising property taxes increase the cost of a home by thousands of dollars per year. An apartment-dweller doesn’t see that tax bill; the landlord has to build it into his rent, but it’s there nevertheless. Property taxes are the single largest input to housing price increases after inflation.
-And yes, inflation must be mentioned. Housing can be considered a driver to inflation, but it goes the other way too; inflation can also be viewed as a driver to housing prices. As everything else goes up, landlords, builders and home resellers need more money next year to maintain last year’s standard of living, so they too must raise their prices on what they have to sell.
-New construction has been plagued with the appliance cost increases of the Obama-Biden and Biden-Harris green-lunacy eras. EPA and big city efforts such as banning natural gas appliances, increasing the cost of single stage furnaces, and mandating more expensive refrigerants have increased the prices of such appliances by thousands of dollars each. Want to build a new 30- or 40-unit apartment or condo building? That’s hundreds of thousands of dollars more (or even millions more) for the developer to shell out and absorb into his rent or sale price when he opens. Green lunacy has been an absolute killer for the affordability of not only new housing, but maintenance of existing housing stock, too, as every appliance replacement now costs thousands more than it did just a few years ago.

We could go on. We’ve barely scratched the surface. But this gives us an idea of the kinds of things that are driving the cost of housing across America.

Now, what has the Congress proposed?

The bill in the news – now passed overwhelmingly by both houses of Congress – is named The 21st Century Road to Housing Act.

What does this act do? Well, among other things:

-It allows the federal government to approve higher home values and higher mortgages.
-It pours more federal money into the housing market through direct and indirect grants.
-It increases income levels covered by federal loans so that more employed people can “qualify” for federal mortgages that they can’t really afford under traditional qualification evaluations.
-It provides a break from some federal environmental regulations to ease and speed up the approval and building process (that one’s good, at least. A rarity).
-It adds more federal money to programs that will fund more government-funded public housing.

That’s all very interesting. But from what we know of the housing problem, is this bill really addressing the issues that have caused affordability challenges?

The Trump administration is already doing its best to lower the cost of appliances and other building supplies (by revoking green-lunacy regulations). They are also trying to both deport the worst criminal illegal aliens, and also, encourage more illegal aliens to self-deport. The administration is trying to build the economic growth, especially the manufacturing renaissance, that will enable more workers to be able to afford better housing.

Congress’ attempt isn’t going to do much good; it just yaps at the heels of the problem without attacking it head-on. But the White House is trying to do what’s needed.

For the most part, though, the rest of the needed solutions are largely out of the federal government’s hands.

We need local, county and state governments to lower property taxes. We need businesses to do less importing and more local production, in order to create jobs here at home. We need individual American citizens to get married younger and start having children.

Some of these problems will take time to resolve themselves. The disruptions caused by online shopping, remote work, and generational demographic change simply cannot be sorted out in a day, no matter how ambitious Congress hopes to be.
But it is disturbing that Congress’ alleged “fix” to the housing affordability issue doesn’t really address any of the nation’s real needs, and instead repeats the errors of the 1980s and 90s that have already caused two housing crashes in recent memory.

Rarely have a White House and a Congress been on such absolutely contrary paths in our history, and rarer still that it’s the White House that gets it so right, and the Congress that gets it so wrong.

Copyright 2026 John F. Di Leo