Unpacking Homebuilder Sentiment in the Wake of New Housing Projects

Unpacking Homebuilder Sentiment in the Wake of New Housing Projects

A fresh study by Redfin reveals compelling attitudes toward housing policies in the United States. An overwhelming 78% of respondents are in favor of policies that champion the construction of more housing units. However, when it comes to actually having new developments in their own neighborhoods, sentiments are a bit more mixed.

Based on the data gathered from 5,079 U.S. residents, it’s evident that while the theory of building more homes is widely supported, practical applications receive a more lukewarm reception. Specifically, only 32% of the pro-building respondents are excited about the idea of an apartment complex sprouting up in their locality. Another 20% openly expressed their reservations, while a significant 48% remained neutral on the issue.

The study, conducted by Qualtrics between May and June 2023, also uncovers interesting contrasts between homeowners and renters. While both groups are largely in favor of pro-housing policies, with 74% of homeowners and 80% of renters supporting them, the enthusiasm dips when it comes to welcoming new apartment complexes in their neighborhoods. Only 25% of homeowners and 28% of renters felt positive about such a development.

When it comes to disapproving of a new apartment complex nearby, homeowners are slightly more critical. About 40% of homeowners would feel negatively about it, compared to 24% of renters. However, neutrality reigns supreme with 35% of homeowners and 49% of renters staying indifferent.

With a housing shortfall of an estimated 3.8 million units as of 2021, and rising costs for both homebuying and renting, the issue is pressing. Increasing the housing supply could significantly alleviate affordability challenges. Among the policies being recommended are tax incentives for developers, the approval of accessory dwelling units (ADUs), and the easing of zoning restrictions.

Daryl Fairweather, Redfin’s Chief Economist, observes that people’s individual preferences like wanting a quiet neighborhood often clash with the larger goal of building more housing. This dichotomy is why community opposition to new housing is tough to navigate, despite wide support for the Yes In My Backyard (YIMBY) movement.

Political affiliations also play a role in housing perceptions. Democrats and Republicans generally support pro-building policies, but their enthusiasm wanes when new constructions are planned for their neighborhoods. More than 83% of Democrats are pro-building, slightly higher than the 75% of Republicans. However, only 34% of Democrats and 24% of Republicans would feel positive about an apartment complex in their locale.

Interestingly, Republican-dominated regions like the South are leading the charge in actual construction, defying the not-in-my-backyard (NIMBY) sentiment often associated with this political group. For instance, Southern states issued 576,000 single-family building permits in August, a 10% increase year over year.

Fairweather concluded by emphasizing that whether one identifies as a YIMBY or a NIMBY, more housing will benefit everyone in terms of supply and affordability. Some states are already making legislative strides. Montana, for example, is witnessing a bipartisan push for zoning reforms, while California has streamlined the process for building ADUs.

The study further revealed that Democrats are nearly twice as likely as Republicans to feel positive about an apartment complex dedicated to low-income residents being built in their neighborhoods. Around 34% of Democrats would feel more positively about such an initiative, as opposed to 19% of Republicans, although about half from both sides would remain neutral.

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