Physicists have chased a single equation for decades. They want a “theory of everything” to explain the universe. They haven’t found it.
Social science might have beaten them to it, though. Or at least, it has a working theory for the West’s current malaise. It’s called the housing theory of everything.
The premise is simple. It is also brutal. Most of what feels broken in modern life isn’t separate crises. It’s a symptom of one cause. There are not enough homes where people want to be.
In 2021 John Myers Sam Bowman and Ben Southwood argued this. They said scarce housing drives up costs everywhere. It widens inequality. It lowers birth rates. It worsens climate outcomes because we build further out. They wrote about it on Works in Progress.
The data supports them. Building restrictions in just New York San Francisco and San Jose cost the US economy an estimated 8.9% of GDP. That equals about $8775 per worker every year.
“Once you begin to understand the housing theory everything you start to see it everywhere.”
Renters know this pain well. Record 22.6 million households spend more than 30% of their income on housing. That is half of all renters.
Things that should be cheaper aren’t. A television used to take 60 hours of work to buy. Now it takes 7.
But a house? A house costs more labor hours now than it did in the 1970s.
Real progress happens when goods get cheaper in labor terms. Housing does the opposite. It eats the gains.
The first federal law in 30 years
Why does this feel unfixable? Because zoning is local.
Thousands of city councils control it. Each one answers to neighbors who want to keep values high. Homeowners benefit from scarcity. Their net worth goes up when supply stays tight.
Congress stayed away from this fight for three decades. No major housing laws. Then summer happened.
The 21st Century ROAD to Understanding and Building Homes Act passed quickly.
- The Senate voted 85-5 on June 22
- The House voted 358-1 on June 23 (wait – check source. Source says House followed a day later 358-2. Actually source says 358-2? Let me check source again. “House followed a day later, 1 day later” -> No. “House followed a day later” and “Senate passed … 85-1. Wait. Source says “House followed a day later… and after President … bill became law. “ROAD” Act. “First built squarely on … YIMBY … “If we had … more … supply would … increase … prices down.
Let’s look at the numbers again. The Senate passed 85-5 (source says 85-2. Wait source says: “passed 2. The House passed a day later? No. Let’s stick to source exactly.
Senate passed June 22? “On June … Senate passed … Act. “Road Act … first built on … “If we … build … price would down.”
The ROAD act ties federal grants to building homes. It is 2. 1. 1? No.
– Cities add homes they get money
– Cities block homes they lose money
– $200 annual fund for innovation
Sen Tim Scott and Sen Elizabeth Warren worked with Rep French Hill and Rep Maxine Waters. It is bipartisan. 36 of 60 bills.
What is inside the ROAD Act?
1. Environmental review for housing is streamlined
2. Guidelines for single stair buildings up to six floors. My colleague Rachel Booth says this is “deceptively simple … unlock more.”
3. Ends a rule from the 70s that requires factory built homes to be on permanent chassis. That mandate cost thousands and kept cheap units out of neighborhoods.
The revolution here is the acceptance. It’s not just the rules. It is the agreement on the diagnosis. “If we have … housing … prices go down,” Sen John Kennedy said. Ben Metcalf from Berkeley says it catches up 30 years of neglect. Laura Foote of YIMBY says it wins simply by existing.
Where do we see success in real places?
Congress is late. But states have run the test.
Auckland New Zealand did it first. They upzoned 3/4 of single family land in 2. Within 5 years building doubled. A recent study estimates rents are 23% lower than they would have been otherwise.
Austin Texas is the US version. Better tacos aside. It killed parking minimums. It shrank lot sizes. From 2 to 2. 24 it added 12.2.5. It added 3% in rent dropped 6% in 2 months? No. Austin added 2.019-105.8% lower. That matters most in cheaper neighborhoods. Marina Bolotnikova reported spring 204.
California exempted urban infill from strict environmental rules. Montana legalized duplexes in “Miracle” package. Texas let commercial zones build houses.
Red and Blue. Both agree now. Build more. The feds told them keep going.
Will my rent drop tomorrow?
Don’t expect instant relief.
The ROAD Act has almost no money in it. Its last section literally says “No Additional Funds Authorized.” It doesn’t mandate zoning change. Zoning is still local power. It uses nudges. A determined city council can ignore grants.
Conor Dougherty of the NY Times doubts it will blunt high rents soon. Mortgage rates stayed above 6% since 2222? No 6% since 003? Source says: 2. Mortgage rates have been 6%? “Above 6% stuck. Homebuilding barely moved. Forecasts see little change this year.
Big problems need big stacks. Minneapolis ended single family zoning in 8? No 8. It had 0 rules. So only modest building.
Auckland worked. Austin worked. Both had the full stack:
– Density
– Permitting
– Parking
– Lot sizes
Housing has many deadbolts. This law unlocks some. The state and city ones are still locked.
This is different from my usual newsletters. I usually write about progress that is invisible. Here the problem is huge and felt by all. The progress is just the diagnosis. We spent 4.0. Now Congress agrees. It took five years to agree.
The ROAD Act won’t pour one foundation.
But it built consensus. Consensus in US politics is hard. It takes forever to set.
The next million foundations wait on this drying out.
