As we wrap up 2024, it’s clear that housing policy has remained a central issue, shaping conversations from city councils to presidential debates. This year brought a mix of progress, challenges, and critical lessons as governments, advocates, and communities worked to tackle the nation’s growing affordability and inventory challenges.

Looking Back on a Momentous 2024

Legal

In the first half of 2024, the biggest housing news was on the legal front with several critical opinions handed down from the United States Supreme Court:

• In April, the United States Supreme Court unanimously ruled in Sheetz v. El Dorado that exactions from municipal ordinances, such as impact fees, are not exempt from the Nollan-Dolan standard.
• Despite being a case about fisheries, Loper Bright v. Raimondo ended four decades of the so-called Chevron Doctrine precedent directing courts to defer to a federal agency’s interpretation of an ambiguous statute it administers. Going forward, the Judicial Branch will review issues or ambiguity.

Housing Takes Center Stage

Housing was elevated to a top-tier issue on the national stage like never before. While housing’s challenges are inherently state and local in focus, voters are feeling the pain caused by inaction across all levels of government.

What Rate Cuts?

The question homebuilders, Realtors, and would-be buyers and sellers kept asking in 2024 was: “When will the Fed cut rates?”

There was jubilation when the Fed announced it would be cutting the federal funds rate by 50 bps in September, only to see mortgage rates climb nearly 100 bps following the much-awaited rate cut. The interest rate environment for the past 24 months is an illustrative example of what housing experts have long said: there is no silver bullet to fixing the housing crisis. This includes interest rates.

2025

But what does this mean for 2025? How do leaders and industry build on the successes of this year while tackling persistent challenges?

Federal Reforms

D-O-G-E.

These four letters have indicated a long overdue review and overhaul of federal regulations is coming to all sectors, including housing. As the Department of Government Efficiency is poised to begin streamlining government, reform-minded individuals hope this not only leads to affordability-centric federal reforms across all types of housing but also inspires similar actions across all levels of government. Congress can also look to incentivize and reward states for taking action to modernize their housing regulatory systems.

State Level Action

Housing’s greatest challenges lie at the local level, and for most states it is the state legislature that builds the system through which communities approve new housing. As several states have shown, when the system isn’t functioning as intended, the state must build a system that can.

Workforce

Addressing a housing supply gap of 3-5 million homes is a tall order, and industry leaders have expressed concerns that without a growth in the number of skilled workers, there are only so many homes that can be built by a workforce that is older and smaller than it was a generation ago. The bright side is that data indicates Gen Z is looking to the skilled trades as a career path. The question is: what can state and federal policymakers do to encourage more movement to the trades?

Growing Issue Demanding a Solution

As several key issues have shown through the years, when faced with large systemic issues policymakers in America have demonstrated a preference for kicking the can down the road. Housing has been no different.

There has been a lot of handwringing and scapegoating within the context of the housing crisis for years now. This has not produced helpful solutions as housing affordability has reached record lows and the current economic environment has led to a housing production slowdown. Existing housing costs will likely rise once consumers return from the sidelines as the interest rate environment becomes more friendly.

If left unaddressed, we can reasonably expect more of the same. The voting public is demanding action and solutions. Failure to alleviate their pains causes the voting public to elect officials who will act.  

Will the housing policy space see another year more impactful than the last? It’s not just that it should; America must see more action in 2025 if we want to address this growing crisis.