In this chapter, the authors explore the factors that contribute to the variation in housing market conditions across different cities in the United States. They begin by discussing the demand for housing, which is driven by population growth, employment, and income. They note that private sector employment is the primary driver of housing demand, with over 85% of all employment in the US being in the private sector. They also discuss the role of government in stimulating job growth and the potential negative consequences of corporate incentives.

The authors then turn to the supply side of the housing market and discuss the factors that determine housing supply, including topography and land use regulations. They note that topographical features such as mountains and bodies of water can restrict housing construction, while land use regulations, such as zoning and building codes, can also limit housing supply. They highlight the contentious issue of single-family zoning, which restricts the construction of multifamily housing, and how it contributes to housing shortages in many cities.

The authors also discuss the role of local politics and the “Homevoter Hypothesis” in shaping housing regulations and development. Homeowners, who make up the majority of households in the US, often oppose changes to land use regulations that could impact the value of their homes. This can hinder efforts to increase housing supply and address housing shortages. The authors provide examples of cities that have implemented zoning reforms to allow for more multifamily housing, and the challenges and controversies that have been associated with these efforts.

Based on their analysis of population growth and housing supply elasticity, the authors develop a typology of cities that helps explain the variation in rates of homelessness. They identify four categories of cities: Rust Belt cities with low population growth and high housing supply; large cities like New York and Los Angeles with moderate population growth and low housing supply; booming cities like Boston, Seattle, and San Francisco with high population growth and low housing supply; and Sun Belt cities with high population growth and high housing supply. They argue that the cities in the last two categories face the greatest challenges in addressing homelessness due to their limited housing supply and high housing costs.

The authors acknowledge that this typology is not exhaustive and that cities can change categories over time. They also discuss the limitations of their analysis and the need for further research on the relationship between housing market conditions and homelessness. In the next chapter, they will provide a vision for how cities and the nation can address the challenges of housing instability and homelessness.

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