Patrick A. McLaughlin is a research fellow at the Hoover Institution.
For years, housing policy discussions focused almost entirely on demand-side subsidies, or on assigning blame for high prices. Meanwhile, the root causes of housing affordability issues remain: It is simply too hard and too expensive to build.
In recent years, however, several abundance-driven reforms have reoriented the debate toward increasing housing supply. These primarily consist of economically sensible and, in many cases, politically courageous changes to zoning and permitting rules.
The harder question is whether the reforms are delivering on their central promise: making housing meaningfully more affordable.
So far, the results are mixed. Targeted reforms have changed, on paper, what is allowed. They have sometimes increased the number of permits issued and diversified the types of homes that can be built. But clear evidence that these reforms have led to broad-based reductions in home prices remains limited, at least to date.
Take the much-discussed “Montana Miracle.” In 2023, the state enacted a sweeping set of zoning and land-use changes intended to unlock housing supply by overriding local barriers. In principle, they should have made it easier to build and lowered prices.
Yet there is a lack of compelling evidence that homes in Montana have become more affordable. Part of the reason is timing: Key provisions were delayed by litigation, and housing markets adjust over years. Permits must translate into projects, projects into completed homes and completed homes into market-wide price effects.
A similar story can be told about many “missing middle” reforms at the local level. Cities such as Portland, Oregon and Minneapolis have been praised for legalizing a wider range of housing types in formerly exclusionary neighborhoods. In Portland, monitoring reports show a substantial increase in permits for duplexes, triplexes, fourplexes and accessory dwelling units.
That progress should not be dismissed. These reforms appear to change the composition of new housing supply and create lower-priced options. In the long run, areas that adopt such policies should offer relatively more affordable housing compared with those that have not. But in the short run, rising interest rates, construction costs and demand pressures can overwhelm the near-term effects of zoning reform.
This does not mean targeted housing reforms are misguided. It means that legalizing more housing is only one part of a much larger system that determines housing costs.
Home prices are not a simple function of how many units are permitted. They are also shaped by how expensive those units are to build. Construction costs, in turn, are heavily influenced by building codes, design mandates, energy requirements and other regulations layered on top of zoning. While some of these rules may deliver clear safety or health benefits at a price buyers are willing to pay, others add significant cost with more ambiguous returns — such as mandates for bird-safe windows.
These regulatory costs matter, because a unit that is legal but not economically viable will never be built. This is where broader regulatory reform deserves a central place in the abundance agenda.
Virginia offers a useful contrast. In recent years, the state has pursued a comprehensive regulatory reform effort overseen by a newly created central office called the Office of Regulatory Management. Agencies were required to inventory existing rules, eliminate unnecessary requirements and justify those that remained. Within this broader framework, Virginia streamlined aspects of its residential building code. State officials estimated these reforms reduced the cost of constructing a new home by an $24,000.
Like the effects of the supply-side reforms, the jury is still out on Virginia’s efforts. But Virginia’s story highlights something important: Reducing regulatory costs embedded in construction can directly affect housing affordability.
Other states have pursued similar broad-based reforms, and the results are instructive. Idaho’s zero-based regulation initiative forced agencies to re-justify their rules, or else let them expire. Similar to Virginia, Oklahoma set targets for cutting a quarter of their regulations. Ohio passed legislation requiring staged reductions in regulatory restrictions, backed by legislative oversight. All of these efforts appear to have reduced compliance burdens, but the degree of success depends on the details.
What distinguishes the more promising cases is not the slogan — whether “abundance” or “red tape reduction” — but the management structure behind it.
Both targeted housing reforms and broad regulatory streamlining efforts tend to falter when they rely on passive implementation. Legalizing more housing types does not guarantee that homes will be built. Ordering agencies to cut regulations does not ensure that regulations will actually be cut, much less that costs will fall. In both cases, success depends on sustained oversight, active management and clear accountability.
When reforms put someone in charge, they are more likely to produce results. When responsibility is diffuse, reforms often stall or disappoint.
The lessons for housing policy are twofold: First, not to choose between zoning reform and regulatory streamlining. Both are necessary. Abundance works best when it is treated as an management challenge, not a one-time legislative victory.
Second, policymakers should focus less on announcing reforms and more on running them. That means pairing housing-specific changes with systematic efforts to reduce unnecessary regulatory costs, and assigning clear responsibility for making sure both actually deliver.
Housing reforms are sorely needed in much of the country, but they need follow-through to make a meaningful dent in high home prices.
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