Stephen Slivinski and Ryan Bourne
President Trump’s new housing executive order is better than much of Washington’s recent affordability discussion because it starts from the right premise: homes are expensive in many places because states and localities have made it too hard to build more of them.
The order does recommend some worthwhile federal deregulation on wetlands, stormwater, NEPA, historic preservation, and other costly housing mandates. But there is also an instruction that HUD, within 60 days, develop a set of regulatory best practices for states and localities to promote housing construction and improved affordability. That is a far healthier instinct than pretending affordability can be delivered through scapegoating investors or spraying more federal money around.
As explained in Cato’s forthcoming affordability handbook in a chapter authored by one of us (Slivinski), average house prices have risen by more than 50 percent since 2020 and rents by at least 30 percent, both well above general inflation. Longer-term, affordability has been in decline too. The median single-family home now sells for around five times median household income, up from 3.5 times in the 1990s.
Our premise is straightforward: the best way to improve affordability today is to expand all types of housing options by removing government-imposed barriers and cost pressures on new construction.
On that score, the executive order’s proposed guidance to states and localities is genuinely encouraging. It points to capping permitting timelines and fees, allowing by-right development, limiting the retroactive application of new building codes, permitting third-party inspections, and ensuring quicker dispute resolution. It also points to curbing mandates that raise building costs, re-examining discrimination against manufactured and modular housing, and removing arbitrary limits on building beyond urban centers, such as growth boundaries and moratoria.
Those are not trivial tweaks. If adopted, they would go directly to the institutional chokepoints that make supply slow, costly, and uncertain. In fact, they closely align with Slivinski’s handbook recommendations to streamline permitting, decentralize inspections, reform building codes, loosen urban growth boundaries, and allow more manufactured housing and accessory dwelling units (ADUs).
Of course, even the executive order still exhibits a preference for some forms of housing over others. While some of its federal streamlining would help all types of development, when it gets specific, the emphasis falls on “affordable single-family homes,” “suburban and exurban neighborhoods,” by-right development for single-family homes, manufactured housing, chattel lending, low-balance mortgages, development beyond urban centers, and “Opportunity Zone” incentives for single-family home construction. That pattern suggests a familiar Republican comfort zone: yes to detached homes, modular homes, and fringe development; less enthusiasm for apartment blocks, dense infill, and broad multifamily liberalization in already built-up places.
That bias is worth pointing out because the affordability problem is not confined to detached housing on the suburban edge. In the handbook, Slivinski notes that some economists estimate local “zoning taxes” can reach $500,000 per quarter-acre in some metro areas, that over 40 percent of the cost of building an apartment complex reflects local regulation, and that extraneous building-code changes account for 11 percent of the cost of a new apartment building. In many high-cost places, apartment blocks, duplexes, townhouses, ADUs, and mixed-use infill are exactly where liberalization would bite hardest.
Nevertheless, we should offer credit where it’s due. The guidance is largely welcome because it urges states and localities toward faster permitting, less building code creep, more private inspection capacity, fewer arbitrary anti-growth restrictions, and more tolerance of lower-cost housing forms than today. That is real progress and much more supply-side in spirit than much of what Congress has been debating. But if any politician wants to be fully serious about abundance, they should not just legalize the housing forms they happen to like. And, of course, if this is to make any real difference, states and localities must actually do it.
