Why Trump’s housing 401(k) mortgage idea was unlikely to lower costs

Some economists are now claiming that the Trump administration’s rapid change, promoting 401(k) retirement plans as a means to homeownership, was never likely to succeed because it ignores the deeper forces driving the housing crisis.

Experts pointed to two main factors causing the most damage: restrictive zoning and regulatory policies that have stifled supply, pushing housing prices out of reach. Restrictive zoning controls what gets built; Organizational policies determine how difficult this is to achieve.

Ben Harris, vice president and director of economic studies at the Brookings Institution, said policies that do not directly increase housing supply are unlikely to lower prices.

“Anything that doesn’t answer the question: Are we going to have more homes at the end of this?” “The response will not be enough,” Harris told Fox News Digital.

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While cities in the South, for example, once saw rapid home construction — including places like Houston and the metro areas of Florida and Phoenix — new construction has slowed sharply in recent years, contributing to higher prices, Harris noted.

Experts say this resistance to new construction is why restrictive zoning and regulatory barriers are at the top of the list of forces driving economic growth in America. Housing calamity.

“There are many, many ways to stop and stop development,” explained Joseph Gurko, a professor of real estate and finance at the Wharton School of the University of Pennsylvania.

“We’ve had very great success with that in the United States.”

Jim Tobin, president and CEO of the National Association of Home Builders, added that the cost Systems It alone plays a huge role in housing affordability.

Tobin explained that roughly $94,000 of the cost of a new single-family home is inflated due to regulations at “all three levels of local, state and federal government.”

Some local governments intentionally restrict growth, adding time, uncertainty and cost to the process, he added.

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Ultimately, the increased costs on builders are passed on to buyers, pricing many of them out of the market. (Mario Tama/Getty Images)

“Time is money in real estate,” he said. “You own the land, you pay taxes, and while you wait for local approvals, the costs keep rising. Many communities then ask developers to install sewer, water, roads and electricity. Infrastructure “And it’s all built into the final price of the home.”

These increased costs to builders eventually pass on to buyers, driving many of them out of the market, economists say.

One of the clearest examples of how these pressures play out is California, where stringent zoning and environmental review laws have severely limited new construction.

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California has some of the strictest zoning laws in the country. (David Paul Morris/Bloomberg/Getty Images)

The state’s regulatory framework has created a massive housing shortage, Wayne Winegarden, a senior fellow in business and economics at the Pacific Research Institute, told Fox News Digital.

In practice, economists say that when housing construction fails to keep pace with population growth and demand, buyers end up competing for a limited number of homes, driving up prices.

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California’s strict zoning laws make building homes more difficult, Winegarden said, such as the California Environmental Quality Act (CEQA), a five-decade-old law that requires builders to “look before they leap,” according to Gov. Gavin Newsom’s Office of Land Use and Climate Innovation.

The framework requires environmental reviews that can significantly delay development and raise costs.

“And we’re short a million homes, which is astronomical like that,” Winegarden said. “This is just basic economics. When supply is not enough for demand, prices go up. Now the median home price in California is almost double the average price in the United States.”