If local businesses are the heart of most American communities, housing for employees could be considered the fuel that keeps them pumping. But statistics point to a housing shortage crisis that’s dealing a critical blow to the economic health of local communities.

During the NPF Local Business Journalism fellowship, journalists received contextual insights about this issue from Alex Horowitz, The Pew Charitable Trust’s project director for housing policy, Yonah Freemark of The Urban Institute’s Housing and Communities Division, and Makinizi Hoover, senior director for housing policy at the U.S. Chamber of Commerce.

Hoover shared research that clearly outlines the central issue: supply versus demand. In her travels around the country, she says the message is pretty much the same. “I met with San Francisco one day and Toledo, Ohio the next day. And you would think that their stories are dramatically different about housing shortages, but at the end of the day, it’s pretty much the same. There’s not homes at prices where people can afford.”

Hoover said the economic impact of the housing shortage in California resulted in $63 billion in lost economic output, nearly 36,000 less in personal income, and over almost 400,000 jobs not created because of the housing shortage from 2008 until 2025.

Horowitz unpacked another major driver of this trend: demographics.

“When a lot of our zoning was adopted originally in the 1920s, the average household size in the US was 4.2, and now we are just under 2.5. So our household sizes have gotten a lot smaller and our housing stock does not reflect that largely because local governments give enormous preference to the most expensive type of housing, single family detached on a large lot with off-street parking. So 63% of households in the US have one or two people in them, but 68% of our homes are single detached, single family detached housing.”

With a quarter of renters spending more than 50% of their income on rent, many Americans are at increased risk of eviction, displacement, homelessness and having other bills crowded out. And where historically home prices averaged about three years of median income, recent census data shows that number has risen to five years of median income.

Ultimately, in addition to increasing the supply of housing, the solution may lie in expanding support to the majority of American workers who can’t afford to buy homes, Freemark said.

“The reality is we have a problem in our federal government, which is that we are directing a large share of subsidies to a lot of people who probably don’t need the subsidies because they can be supported by the market, but we’re not directing as many subsidies to people in the lower-income area. And interestingly, the problem has gotten worse since about the early 1990s.”

Access the full transcript here.

This fellowship is sponsored by the U.S. Chamber of Commerce as a continuation of a journalism training and award program launched in 2025. NPF is solely responsible for the content.