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This article is part of The Rooftop, a blog and multimedia series from ������Ƶ’s Future of Land and Housing program. Featuring insights from experts across diverse fields, the series is a home for bold ideas to improve housing in the United States and globally.

When it comes to housing, two questions have nagged America for over a decade. Why does it cost so much to build a single house (or apartment)? And why can’t we build more of them? These questions have crystallized in the nation’s current focus on the affordability of the cost of living.��

Cost and quantity�� are two related, but distinctly different, issues that often get conflated in our attempt to shortcut our way to a solution in today’s ubiquitous modality of “on-demand, faster is better, automate everything.”

It is true that building costs have soared, and while there may be ways to build at lower cost, the cost of major inputs such as building materials (wood, glass, concrete, steel, etc.) and labor are determined by broader markets that extend far beyond just homebuilding. In our capitalist society, it is anathema to try to impose price controls on goods and services.�� The market sets prices based on supply and demand and can mostly be influenced downward by more competition, policy refinements, and potentially public investment.��

Some have even been distracted by the siren call of the 3D-printed home—thinking that by putting a machine to work 24 hours a day we will significantly reduce labor and material costs, resulting in more homes that cost less.�� While 3D-printing may become a common tool in the homebuilding industry over the next decade or two, it will not, and cannot, make a material difference in the near term regarding housing prices or availability.

The largest public homebuilders and manufactured housing producers are building at or around $100 per square foot—a price point that can yield a three-bedroom home for $200,000, including the cost of the land—which would achieve general affordability in most markets. However, at this point, that cost level can only be accomplished using site-built methodologies by producing at massive scale on undeveloped land of several acres, or by producing completed homes in factories that can be delivered to a fairly limited number of sites with zoning that permits “manufactured” housing.

Many of the home building opportunities the market seeks are in already developed communities—infill lots that can accommodate more single and multifamily homes that are one-off, bespoke projects that currently do not benefit from any economies of scale. While blessed with location, they are burdened by their bespoke nature.��

To make housing more affordable, the core focus has to be on process. Process determines where we build, how we build, and what is legal to build. Essentially, we have gummed up the works of our homebuilding process on both the policy and market-driven sides. Policy has been added at all levels of government and rarely subtracted from or coordinated across levels, while homebuilders and the specialized trades, especially the small and mid-sized companies that build around 50 percent of the homes in the U.S. annually, have not designed methods to efficiently navigate the process, and the capital providers have under-innovated their business models.��

If we fix the process to both streamline a highly complex and slow regulatory framework at the federal, state, and local levels, while also unleashing innovation and new business models among the builders and financiers of housing production, then we will see the housing market return to a supply-demand equilibrium that will deliver the affordability and attainability for which the nation is calling.

As the U.S. population boomed from , we historically built housing outward into suburbs (sprawl) and upward in cities (multifamily density). But building new greenfield housing on previously undeveloped land requires new infrastructure, which is expensive and hard to finance, making it hard to keep housing construction costs down.�� Meanwhile, building vertically requires concrete, steel, and elaborate and complex life-safety systems, all much more expensive than the materials and engineering required for low-rise construction.

That leaves only one alternative option, which is to build “inward,” building gentle density such as single-family detached homes, townhomes, and low-rise multifamily homes on smaller lots in developed areas that are already connected to physical infrastructure (electric, water, sewer, roads, transit) and social infrastructure (schools, hospitals, daycare, parks). This is starting to happen at scale in many parts of the country, from but it tends to be the exception rather than the norm.������

At the same time, we need to enable builders to build to a price point that people can afford.

That means reducing costs by reducing risk, accelerating the project start-to-completion timeframe, streamlining regulations so they are predictable, effective, and efficient, and lowering the cost of land, which in many markets can represent up to 40 percent of the cost of a new home or apartment.

Significant cost reductions in housing production that translate to lower prices for renters and homebuyers can only be achieved by eliminating the that has accumulated over the past two decades. Then we must continue building to ensure that housing scarcity is not the cause of unaffordability, especially for those earning the area median income.����

To build more we need to change how we build, how we regulate, and how we capitalize the process of going from dirt to doorway.

The approach has to start at the systems-level and identify where friction and pain points exist in the very long value chain that produces a unit of housing, from land acquisition to occupancy. Improving just one or two of the stages along the chain will not make a material difference because of their interdependence; change must occur across the board. For example, accelerating permitting alone will not yield meaningful cost savings unless land development, capital, and labor constraints, along with other challenges, are addressed concurrently.

At , where I serve as a Fellow and Co-founder of the ,��we believe that the way to change complex systems, such as housing production, is to enable numerous experiments. The is a scoping fund hosted by Renaissance Philanthropy aiming to accelerate and amplify early-stage interventions by providing grant capital to policy and market innovators with emerging solutions that need prototyping and piloting to determine whether they work and have potential to scale.

We think that some of the most important challenges primed for innovation in each of the seven stages of the value chain are:

Land

• Where is there publicly owned land that is undeveloped or underdeveloped that is already connected to infrastructure?
• Where are lots available for housing development and/or increased density that are being held back from development? How can we put those parcels into play for development?

Infrastructure

• How can we make better use of our existing infrastructure to support new home development?
• How can utilities be better integrated into the development process to ensure sufficient energy and water to support homebuilding, and to make projects more “plug and play” when it comes to utilities?

Design

• How can we transform the design and engineering aspects of smaller “bespoke” projects into more repeatable and scalable components?
• How do we build greater acceptance—even demand—for housing components that are built offsite in factory settings?
• How can we make smaller footprints feel like they live larger?

Approvals

• How do we simplify zoning so that it uses a common lexicon across the country, and ensure that zoning codes for every jurisdiction are digitized, up-to-date, accessible, and in the public realm?
• How do we streamline and accelerate permitting and inspection processes without sacrificing safety, health, and public interest?

Capital

• How do we better price the risk of pre-development and construction capital?
• How do we make that capital more readily available to the smaller and mid-sized builders?
• How can we productize third-party guarantees to unlock homebuilding opportunities?

Construction

• How can we accelerate the adoption of innovative materials and processes in homebuilding that meet code requirements while still being new?
• How do we grow the skilled trades to meet the needs of the building boom we are calling for?

Occupancy

• What rental and ownership models beyond standard leases and mortgages can make occupancy more affordable?
• How do we recalibrate insurance to be priced to actual risk and performance history?
• How do we shift the consumer mindset toward the “total cost of occupancy,” which captures the true cost of living in a home, not just the upfront cost?

Over the next several months, Renaissance Philanthropy will be marshaling philanthropic resources to deploy into innovations that address these and other opportunities to increase housing supply and affordability. There is a growing coalition of the willing coming together from all sectors to focus on overcoming the inertia that keeps housing production in its current holding pattern and set us on a pathway toward achievable outcomes where housing scarcity is eliminated, and housing abundance fueled by systems-level change is the norm.��

If you have an early-stage solution that can deliver system-level change to our housing supply crisis, we encourage you to submit an today.

Editor’s note: The views expressed in the articles on The Rooftop are those of the authors alone and do not necessarily reflect the opinions or policy positions of ������Ƶ.��