A new report from the Groundwork Collaborative argues that the current push to deregulate land use will fail to address the U.S. housing affordability crisis without significant changes to federal financing policy.
The brief, released March 25, 2026, challenges the growing consensus among policymakers that restrictive zoning and land-use regulations are the primary drivers of high rents and home prices.
For many low-income families, housing costs now consume a disproportionate share of their earnings. Those making less than $30,000 a year often spend over 60% of their annual income on housing, according to the report.
While economists like Edward Glaeser and Joseph Gyourko have argued that regulations prevent sufficient new homes from reaching the market, the Groundwork Collaborative suggests that tight financing conditions are the true bottleneck.
The financing gap
The report highlights a decade of diverging costs, noting that since 2012, rents have risen by more than 50% while average hourly wages have grown at a much slower rate. During the same period, home prices have nearly doubled.
This surge in costs follows a period of stagnant construction. The brief notes that while the U.S. economy avoided a second Great Depression, tight financing conditions constrained housing production even as the market began to recover.
Lower-income families and younger renters are currently the most vulnerable to these shifts. The report observes that the proportion of homeowners in their 30s and 40s fell by approximately 10 percentage points between 2007 and 2017.
Groundwork Collaborative researchers argue that simply increasing supply through deregulation is insufficient. They contend that without addressing the federal policy levers that govern housing finance, the market will continue to face supply shortages.
High housing costs in major metropolitan areas also impact broader economic mobility. The report suggests that expensive housing creates a zero-sum competition for resources in high-wage cities, stifling growth and limiting access to jobs and public services.
