Legalizing Dense Development is the Single Most Effective Solution to the Housing Crisis

Recent developments in Austin, TX significantly illuminate how legalizing and encouraging dense housing development is not just a solution but is the most effective strategy to combat the housing affordability crisis. Austin's explosive growth during the pandemic increased its population to about 2.22 million by 2023. This rapid influx initially drove housing prices and rents to unprecedented levels. However, a proactive approach to housing development has begun to counteract these trends​.

From 2010 to 2020, Austin added over 90,000 housing units (which includes all types of housing such as houses, townhomes, condos, and apartments). This construction spree has recently accelerated due to numerous changes in the zoning code to allow dense housing in more places. Now with the completion of 24,000 units since 2020 and more in the pipeline—37,000 under construction and 28,000 proposed, (that’s 84,000 more housing units total) this aggressive expansion of housing supply has directly led to the reduction in rental prices, with a 2.8% drop in rent over the past year​,​ and a drop of 14.29% in rental rates October 2023 alone.

The connection between housing supply and rental prices is clear and supported by economic principles. When cities legalize dense development, they enable the construction of more housing units in existing urban areas, effectively addressing the supply constraints that often exacerbated housing shortages and inflate rental costs. This approach not only increases affordability by balancing supply and demand but also contributes to urban sustainability by promoting higher-density living options which are often more energy-efficient and resource-conservative than sprawling suburban developments.

Austin’s case strongly argues that legalizing dense development is the single most effective strategy to resolve the housing crisis. By fostering an environment where construction can proceed at pace with demand, cities can ensure that housing remains accessible and affordable for all residents. The evidence suggests that when it comes to solving the housing crisis, enabling dense development isn't just one part of the solution—it's the cornerstone.

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Michael Moore is the Founder and Editor-in-Chief of Resident Urbanist. He has previously written for Streetsblog and Millennial American Dream, he has also been covered on Planetizen, the How We Work podcast, and StrongHaven. You can follow him on Threads, Twitter, LinkedIn, and Instagram.