Housing reform is a management problem

Zoning and permitting reforms are necessary to unlock housing supply, but more could be done to lower the cost of building new homes.

I recently published a Washington Post op-ed about a question that keeps coming up whenever “abundance” and pro-housing reforms make the news: If we’ve started changing zoning and permitting rules, why don’t we see affordability improving faster?

My argument is pretty simple: legal/regulatory changes (especially zoning and permitting) are necessary, but they may not be sufficient. Reforms underdeliver when they stop at the “we passed a bill” stage—because housing affordability is the end result of a long production chain, and that chain only moves when someone is accountable for making it move.

What the housing supply agenda gets right

For a long time, housing policy talk leaned heavily on demand-side moves—subsidies, credits, and other ways to help buyers or renters pay more. Or it devolved into blame games.

The more recent shift toward supply is a welcome change. Across states and cities, we’ve seen reforms that loosen zoning, simplify permitting, and legalize more housing types—often in places that used to reserve large portions of land for only one kind of housing.

That’s the right direction. When supply can’t expand fast enough and a new generation wants housing, prices rise.

Why results are mixed so far

Many of these reforms are still not clearly delivering broad-based price relief—at least not yet. That doesn’t mean the reforms are wrong. It means we should be honest about what it takes to translate “legalized” into “built,” and “built” into “cheaper.”

A few reasons the affordability payoff can take longer than advocates (or critics) expect:

• Timing and implementation delays. Many reforms have been tied up in litigation, phased in slowly, or require agencies and local governments to rewrite rules before anything changes on the ground.

• Housing supply is a pipeline, not a switch. Permits need to turn into projects; projects need to become completed homes; completed homes need to be numerous enough to influence the broader market.

• Short-run economic headwinds can swamp early gains. Interest rates, construction costs, and demand pressures can overpower near-term effects even when permitting activity improves.

In other words: some places are successfully changing what’s allowed and what gets permitted (including more “missing middle” housing). That’s meaningful progress. But it’s not automatic, it’s not always fast, and the positive effects (towards more affordable housing) can be masked by other economic factors.

The other half of the affordability equation: the cost to build

Even if zoning and permitting are fixed, housing can remain expensive if it’s still costly to produce. As I wrote, “Legalizing more housing is only one part of a much larger system that determines housing costs.” The production cost isn’t driven only by land and labor. It’s also shaped by layers of regulation that sit “on top” of zoning: building codes, design requirements, energy rules, and a long list of mandates.

Some of these rules provide benefits people clearly want and are willing to pay for. Others add costs with fuzzier returns.

The big takeaway on building cost is this: even if a housing unit can be more easily built from a zoning and permitting perspective, actual construction costs may mean the new build isn’t economically viable. And if it’s not viable, it won’t get built—meaning the legal reform doesn’t translate into real supply.

Regulatory streamlining with a center of gravity

One of the examples I discuss in the op-ed is Virginia, which pursued a broader regulatory reform effort with oversight from a dedicated central office (its Office of Regulatory Management). The Virginia approach is to inventory existing rules, eliminate unnecessary requirements, and justify what remains. Within that broader effort, Virginia streamlined parts of its residential building code, and state officials estimated the change reduced the cost of constructing a new home by $24,000.

I also point to other state efforts with similar “system-wide” ambitions—initiatives that force agencies to re-justify rules, set reduction targets, or require staged cuts with legislative oversight.

I used to stand by the axiom, “What gets measured, gets managed.” But these days, having studied broad reform efforts across numerous states and jurisdictions, I’ve refined my take. Measurement alone doesn’t appear sufficient if no one is handed the job of management. Looking across states at where red tape reduction has been very successful vs. moderately or not successful, I’ve identified one common thread: where reform has a real management structure, it’s more likely to translate into real change. Virginia’s Office of Regulatory Management is a great example of creating a management job in charge of effecting the reform.

Do permitting and zoning reforms require similar oversight offices? Is it sufficient to merely create the option for multi-family housing to be built where single-family was previously the only type allowed? Or do policymakers need to actively check in on whether those multi-family permits are actually being issued? Based on what I’ve seen for broad reg reform efforts, you need to actively check in on things and probably need to actively manage those people who are responsible for permitting. The reform has effectively changed their job, and someone needs to make sure they’re doing the new job correctly.

Success depends on oversight, execution, and accountability—someone waking up every day responsible for results. When responsibility is spread across lots of actors, it becomes easy for everyone to say the right things while nothing moves quickly. When there’s clear ownership, reforms have a better chance of producing measurable outcomes.

Two takeaways I hope policymakers (and advocates) absorb

1. Don’t treat zoning reform and regulatory streamlining as competing agendas. If you want affordability, you’ll probably need both: make it easier to build and make it less expensive to build.

2. Shift focus from announcements to operations. Passing a reform is the start of the work, not the finish line. The real question is: who is responsible for ensuring the reform translates into permits, projects, completions, and (eventually) prices?

Concluding thoughts

If a policymaker were to ask me to evaluate whether a housing reform agenda is likely to deliver, I’d look for a few concrete signals that go beyond supply legalization (i.e., zoning/permitting reforms):

• Is there a named office / leader responsible for implementation and outcomes?

• Are there metrics that track the full pipeline (not just “units legalized”)?

• Are policymakers pairing supply legalization with cost-focused reforms that make projects pencil out?

• Is there a plan for follow-through over multiple years, not just one legislative session?

Housing reform is overdue in much of the country. But if we want it to make a real dent in prices, we have to treat it like a management challenge that requires sustained execution.