The James Madison Institute (JMI) has published an extensive report on the housing affordability crisis in Florida.
The problem? “The increasing housing prices and rising rents driven by a lack of inventory,” the report lays out.
The report by JMI shows that home prices have risen sharply by 60% since 2019, while existing home sales have dropped to their lowest level in 30 years.
Root Causes of the Housing Crisis
JMI says there are several reasons why.
Restrictive land-use regulations, national supply chain and inflationary pressures, along with tax and insurance structures, not investor activity.
“Regulations often restrict the type and density of housing that can be built, pushing developers toward larger, more expensive homes, limiting supply, and pushing prices higher,” said the report.
On top of that, permitting and other regulatory hurdles slow the construction process and can delay or block starter-home construction altogether, making it less attractive to developers.
JMI also notes that rising interest rates and higher property insurance premiums make it more costly to purchase homes, while population growth and migration to high-demand cities increase competition, further exacerbating the problem.
Single-Family Rentals.
JMI addressed the issue by highlighting the role of institutional investors, showing that institutional investors (Wall Street) are a small part of the overall housing market, and that housing supply constraints are the main drivers of rising costs.
Housing Affordability, Supply Constraints, and the Investor Debate
The report says housing affordability pressures have intensified across the U.S States due to limited inventory and rising housing costs, placing 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 capping, taxing, or regulating investors, which inevitably brings consequences of limited housing choices.
Policy Pathways to Expanding Housing Supply: A Supply-Focused Framework
The JMI report details how the housing affordability can be addressed and that should be through a supply-driven approach.
Policymakers seeking meaningful progress should focus on expanding production, reducing regulatory friction, and diversifying housing types, including single-family rentals (SFRs) and build-to-rent communities. This can be done by streamlining the permitting process, addressing zoning restrictions, and expanding the types of permitted dwellings to include single-family rentals and build-to-rent projects,’ said JMI.
