Why is rent so expensive? The short answer is that there aren't enough homes for the people who need them. Published estimates say the country is millions of homes short, from 3.7 million (Freddie Mac, 2024) to 5.5 million (National Association of Realtors, 2020).[1] When there aren't enough homes, landlords don't have to compete for tenants, and you pay for it.
You can see it in what people are paying. In 2024 a record 22.7 million renter households, about half of all renters, spent more than 30% of their income on housing. The number of apartments renting for under $1,000 a month fell by 30% between 2014 and 2024.[2]
One reason we don't build is that the rules won't let us. Local zoning decides what can go where. In California, counting unincorporated areas, 95.8% of residential land is zoned for single-family homes only.[3] Land zoned that way can't hold an apartment building, with or without a bakery downstairs.
Places that change the rules see results. Minneapolis ended single-family zoning and got rid of parking requirements. From 2017 to 2022, rents there rose just 1%, while they rose 14% in the rest of Minnesota.[4] Other things were going on in those years too, but the gap is hard to ignore. Auckland, New Zealand, opened about three-quarters of its residential land to more housing in 2016. Six years after the change took full effect, a University of Auckland economist estimated in a working paper that three-bedroom rents were 22% to 35% lower than they would have been without it.[5]
Zoning is local, but federal money isn't. Congress can reward the cities and states that legalize apartments near jobs and transit, and stop paying to widen highways out to the next subdivision while blocking homes in the places people already want to live.
The objection: "New apartments are all luxury. They don't help regular renters."
New buildings help people who never set foot in them. Economist Evan Mast tracked who moved into new market-rate buildings and who moved into the homes they left. For every 100 people housed in a new building, 45 to 70 people end up moving out of below-median-income neighborhoods, mostly within three years.[6] The Federal Reserve Bank of Minneapolis put it at about 70 openings in lower-income neighborhoods for every 100 new market-rate apartments, within five years.[7]
Sources
- Congressional Research Service, "Estimates of a 'Housing Shortage'" (IN12628), December 15, 2025. https://www.everycrsreport.com/reports/IN12628.html
- National Low Income Housing Coalition, on Harvard Joint Center for Housing Studies, "The State of the Nation's Housing 2026." https://nlihc.org/resource/jchss-2026-state-nations-housing-report-finds-cost-burdens-renters-continue-rise-amid
- UC Berkeley Othering and Belonging Institute, "Single-Family Zoning in California: A Statewide Analysis," 2024. https://belonging.berkeley.edu/single-family-zoning-california-statewide-analysis
- NPR (via WHYY), on Pew Charitable Trusts research, February 17, 2024. https://whyy.org/npr-story/housing-shortage-zoning-reform-cities/
- Ryan Greenaway-McGrevy, "Can Zoning Reform Reduce Housing Costs? Evidence from Rents in Auckland," University of Auckland Economic Policy Centre working paper 016, May 2023. https://cdn.auckland.ac.nz/assets/business/about/our-research/research-institutes-and-centres/Economic-Policy-Centre--EPC-/WP016.pdf
- Evan Mast, "JUE Insight: The effect of new market-rate housing construction on the low-income housing market," Journal of Urban Economics, 2021. https://doi.org/10.1016/j.jue.2021.103383
- Federal Reserve Bank of Minneapolis, "How new apartments create opportunities for all," 2024. https://www.minneapolisfed.org/article/2024/how-new-apartments-create-opportunities-for-all