Jason Ward has reason to hope that America can pull itself out of a historic housing crisis. Yes, it needs to build millions more homes. Yes, home prices and rents have become unsustainable. But then again, he says, consider Austin, Texas.
Like many American cities in recent years, Austin was fast becoming “an LA-type place to live, with prices just getting very out of hand,” said Ward, an economist at RAND. Then it passed a series of reforms to make it easier to build housing. As construction picked up, home prices and rents came down by double-digit percentages in a few years.
Ward directs the RAND Housing Center. Its research and analysis aims to help communities across the United States find effective pathways to the kind of increased affordability Austin has achieved. That means highlighting effective policy solutions to make rents more affordable, to bring home prices back into reach for middle-income families, and to get more people living on the streets into stable housing.
The Austin experience, Ward said, “really gives me hope that if we can persistently produce housing in a way that’s cost-effective, we can see timely, meaningful increases in housing affordability.”
Let’s start with the basics. What is happening to make home prices so unaffordable for so many people?
That’s actually a very controversial question—as you can tell from the many housing proposals being debated around the U.S. Those cover everything from easing zoning restrictions to helping people make down payments to banning corporate ownership of homes. But the overwhelming evidence points to persistent underproduction of housing as the most meaningful long-term driver. This can be a very complex issue, with a lot of social and political considerations—but it ultimately comes down to supply and demand.
The housing crisis can be a very complex issue, with a lot of social and political considerations—but it ultimately comes down to supply and demand.
What are your priorities as director of the RAND Housing Center?
We’re really focusing on research that supports building smarter and easier. That might include studies analyzing the effectiveness of state zoning and land-use reforms, local work around building codes, and doing more state-to-state comparisons of housing production costs and what’s behind them. We’re also starting to work directly with cities to understand how their local contexts affect housing production and costs. And we’re aiming to help state and local officials better plan and finance infrastructure improvements to support housing growth.
There’s a lot of interest right now in housing affordability, a lot of momentum for policy changes. Our main priority is to make the most of this opening to produce some helpful, credible, and timely research.
Your research has shown that in California, at least, environmental and land-use laws have been key drivers of high development costs. How would you reform those laws while preserving their original protections and intent?
The original intent of California’s statewide environmental law was to make sure that things like dams or major road projects got a full public hearing, that people had a voice in the process. But over time, courts interpreted it to apply to anything that required local approval. That often means housing, and so it became a way to block housing projects. California recently passed laws to exempt most classes of housing production from these requirements, so we’ll see in the next couple of years how effective that is. But those reforms don’t affect the kinds of big public works projects that the law was intended for. In that sense, these reforms are really just moving the law back toward its original intent.
What’s one finding from your research that you think deserves more attention?
I feel very passionately that not enough attention is being paid to the high cost of building affordable housing. I’ve heard from many developers, often mission-driven nonprofits, saying they would love to build cost-effective, affordable apartments, but they can’t. They need to pull together four, five, six funding sources to cover the costs. Those sources all come with their own design and building requirements—things like every apartment needing to have basic cable, or rules on where trash containers can go. There’s been no effort to harmonize or strip away some of those requirements, which run to dozens of pages just for one funding source. There could be a lot of savings there, with really no cost to any major social goals. That would help produce more housing for low-income families with the same amount of money we are spending today.
Most of your research has focused on California. How much of a bellwether is it for the rest of the country?
California is really the poster child for letting affordability get really, really out of hand. If you can address the problems in California, you’re going to be able to address those same problems more easily almost anywhere else. That said, we’re seeing the same affordability pressures in many other places, the same problems with affordable housing production. That’s why we’re trying to focus on being responsive to local contexts, to give policymakers the tools that fit their specific situations.
Many developers say they would love to build cost-effective, affordable apartments, but they can’t. They need to pull together four, five, six funding sources to cover the costs.
You’ve studied everything from health to education to military basic pay as an economist at RAND. What draws you to housing as your main focus?
Housing is just a determinant of so many life outcomes. It’s the main source of wealth for many people. It plays a role in educational outcomes. When I moved to California to start working for RAND, the crushing problem of unsheltered homelessness really focused me in on the topic of housing affordability. I was lucky enough to be asked to help develop our housing research agenda, and I’ve just never looked back. I wake up every day really feeling passionate and excited about what I’m able to work on.
