Build or Bleed: The Three Levers That Will Decide Whether America Still Builds the Future

We are eight million homes short. Eight. Million.

A new house costs $450,000 while most families live on $81,000. In the cities that invent the future, the median home has passed a million dollars and a decent apartment eats half a good salary. Half of America’s renters now spend more than thirty percent of their income just to sleep indoors. For the first time in living memory, the United States has the least affordable housing of any large rich country on earth.

This is not a housing crisis. It is slow-motion economic suicide.

When the best young engineers, teachers, nurses, and founders can’t live where the work is, the country stops compounding. When twenty-somethings give up on kids because they can’t afford space, the demographic dividend that powered the American century turns into a fiscal death spiral. Singapore, Berlin, Seoul, Toronto—they aren’t waiting. They’re already taking our talent.

The shortage is entirely man-made. Which means it can be un-made. But almost everything Washington calls “housing policy” is theater. Another hundred thousand subsidized units a decade, a few upzonings around light-rail stops—gestures that barely dent an eight-million-unit hole.

Eighty percent of the outcome rests on three levers. Three. Pull them hard and fast, and we build our way out. Fail, and we bleed the century away.

Lever One: End the local veto

In every productive metro, seventy-five to ninety percent of the land is zoned only for detached single-family houses. On the scraps that allow apartments, projects still drown in five to seven years of hearings and lawsuits. California’s CEQA is the most infamous, but every state has its own flavor. The bitter twist: many of the neighborhoods that now block new homes with “historic character” arguments sit exactly where redlining maps once drew thick red lines. Same borders, new excuses.

Look abroad and the verdict is merciless. Tokyo adds 150,000 homes a year on less land than Connecticut because Japan treats housing as infrastructure: multifamily is legal by right almost everywhere. Pre-zoning Houston kept prices flat for decades. Minneapolis killed single-family zoning citywide in 2019 and permitting instantly jumped. Auckland upzoned in 2016 and construction doubled in three years.

The fix is blunt and federal: withhold fifteen to twenty percent of highway, broadband, water, and energy grants from any state or city that refuses to legalize apartments and townhouses by right within a mile of jobs and transit. Add a narrow override of state-level environmental review abuse for housing. Congress has used the exact same hammer before—speed limits, drinking age, drunk driving. It works. Do it tomorrow and two to three million homes a year become possible the day after.

Lever Two: Stop subsidizing yesterday’s land

Right now the federal government is quietly running the biggest land-speculation racket on earth, and most Americans have no idea it’s happening.

Here’s the trick: when a bank writes a normal home loan under today’s limit (about $766,000 in most places, higher in expensive counties), Fannie Mae and Freddie Mac stand behind it. That government backstop lets the bank offer you a 30-year fixed mortgage at the lowest interest rate in the world. Add in the mortgage-interest deduction and property-tax break on top, and Washington is effectively handing buyers hundreds of thousands of extra dollars of borrowing power.

That sounds great—until you realize almost all of that extra money gets poured straight into bidding wars over the same old houses. The lumber and concrete didn’t get ten times more expensive in California; the government simply gave the marginal buyer another half-million in cheap debt to outbid the next family. The result? The dirt under a 1950s ranch house in the Bay Area is now worth more than the GDP of some small countries.

Meanwhile, a developer who wants to build two hundred brand-new apartments for normal people can’t touch that river of 30-year, government-backed money. He gets five-year bank loans at higher rates instead. So we have infinite cheap capital for bidding up yesterday’s houses and almost none for building tomorrow’s.

Fix it with one clean stroke.

Freeze the size of loans that get the full government guarantee at $500,000 everywhere in America—no more special bonuses for expensive zip codes—and tie future increases only to the actual cost of lumber, concrete, and labor, never to skyrocketing land prices. Kill the tax deductions on any debt above that amount. Then take all the subsidy dollars that just evaporated from the high-end market and redirect them into brand-new 30-year, ultra-cheap, government-backed loans—but only for freshly built apartments and houses aimed at middle-class families.

The effect is immediate and brutal for the right people: buying an existing million-dollar teardown suddenly gets a lot more expensive for the hedge-fund guy, while building three hundred new units at $350,000 each becomes the best business on earth. Capital chases shovels in the ground instead of bidding wars over 1970s kitchens. For the first time in fifty years the single biggest federal housing program stops inflating yesterday’s land and starts flooding the country with new homes.

One law, one move, and the game flips.

Lever Three: Industrialize construction or lose

Even with perfect rules and perfect finance, we still build houses the way we did when Eisenhower was president—sticks in the rain, guys with hammers, weather delays, union restrictions. Productivity has gone backward while South Korea, Japan, and Sweden moved entire supply chains into factories. One plant outside Tokyo produces six hundred apartments a month that get craned into place in days.

Launch a fifty-billion-dollar prize-and-purchase program for any factory that can deliver quality homes at $150–$200 a square foot all-in. National reciprocity: approve a system once and it’s legal in all fifty states, the way we treat airplanes. Buy the first half-million units straight from the new factories for military bases and federal land to give them instant scale.

Cut hard costs forty percent and a starter home becomes buildable for a quarter-million even on expensive ground.

Do these three things—only these three—and by the middle of the next decade we are cranking out five million homes a year again. Rents collapse to sane levels. Ownership returns to the middle class. Young families move back to cities. The country starts compounding again.

Fail, and the bleed becomes permanent: a high-cost, low-birth, low-mobility museum of mid-century suburbs where only the kids of existing owners can afford to live where the future gets made. The best minds quietly book one-way tickets to places that still know how to build.

America has a choice. Build or bleed.

The clock is running.