America Doesn’t Have a Housing “Shortage” (It’s Something Much Worse) · On The Market · Radar

Measuring the Housing Shortage1:10 – 5:42

1:10

[upbeat music] Kirk, welcome to On the Market.

1:17

Thanks so much for being here.

Kirk McClureGuest

1:19

It's a pleasure.

Kirk McClureGuest

1:19

Thanks for inviting me.

1:21

Yeah.

1:21

I've been looking forward to this interview for a while now.

1:24

I know you were traveling all summer.

1:25

But, uh, you know, there is this narrative that's very pervasive in the real estate world that we have a housing shortage in the United States, but your work calls that into question.

1:39

So what got you interested in this topic in the first place?

Kirk McClureGuest

1:42

Well, I have to tell you, um, I assumed that the narrative was correct when, uh, my colleague Alex Schwartz and I started.

Kirk McClureGuest

1:53

We were, uh, talking about, uh, the shortage and asked what seemed to be the fairly straightforward question, "Well, is the shortage similar across all markets in the United States?" And our initial working hypothesis is that we would find a greater shortage in the so-called hot markets, you know-

2:16

Mm-hmm

Kirk McClureGuest

2:16

...

Kirk McClureGuest

2:16

the East Coast, Boston, uh, New York, Washington, Miami, and on the West Coast, Seattle, San Francisco, Los Angeles, San Diego.

Kirk McClureGuest

2:25

Um, and so we went about trying to quantify that and answer some questions about what it meant in terms of translation into affordability.

Kirk McClureGuest

2:35

Simply put, we couldn't find it.

Kirk McClureGuest

2:38

So then we became, uh, very skeptical of our own work and passed it around to a few people.

Kirk McClureGuest

2:44

But let me tell you the, the very basics that we found.

Kirk McClureGuest

2:48

If you go to decennial census data, what we found for the period of 2000 to 2020, population grew by about 18%, 17.8 to be exact.

Kirk McClureGuest

3:02

The households grew by a greater number, 20.3%.

Kirk McClureGuest

3:09

And the quick sideline there is the only way households can grow faster than population is that there is some ample inventory of housing.

Kirk McClureGuest

3:22

Now, it's possible, unlikely, but it's possible that w- the increase was drawing down the inventory of vacant units when units were not being added quickly enough.

Kirk McClureGuest

3:33

That, that's possible.

Kirk McClureGuest

3:35

But in fact, that wasn't the case.

Kirk McClureGuest

3:39

We found from, again, 2000 to 2020, housing units grew by 21.2%.