GlobeSt.com: Low Land Supply is Behind the Housing Crisis

By: Kelsi Maree Borland

November 29, 2021 | GlobeSt.com

The housing crisis is among the biggest challenges across the country. Home prices and apartment rents are frequently reaching new records, thanks largely to a housing shortage. While there are several factors at play—from high construction costs to limited labor—the limited availability of developable land is a fundamental challenge. No matter how much it costs to build, you have to have a land site.

“The lack of developable land today is a direct result of the Great Recession when the housing and financial markets crashed,” Noah Breakstone, CEO at BTI Partners, tells GlobeSt.com. “During these years, the development of new residential communities came to a halt for several reasons, including the lack of financing for developers and home buyers and an abundance of discounted inventory due to the wave of foreclosed homes. Today, we are seeing the consequences of a relatively prolonged gap in the acquisition, entitlement, and development of land for new residential communities nearly a decade ago.”

It can take two to four years, depending on the location, to prep ready-to-build land for new development. This includes securing entitlements and permits. “We missed several years of that process so, as a result, we have less developable land available for new construction,” says Breakstone. “This has resulted in a significant national housing deficit.”...

In Oregon, this process has been very slow for a long time, as Dr. Gerard Mildner points out in his article in HFO's December 2021 edition of The Northwest Apartment Investor. (See "The Collapse of Portland's Suburban Housing Production," on page 2).