The Fight for Affordable Housing

This podcast is brought to you by ReliaQuest. Cybercriminals are constantly attacking. They want your data. They want your identity. They want your innovation. RelyQuest fortifies your business with agentic defense, AI that detects, contains, and eliminates cyber threats in minutes. It helps your security team move faster at the work that matters most to protect the business now and delivers insights to help them predict what's next. RelyaQuest. Agentic Defense for the Enterprise. Learn more at ReliQuest.com. That's R-E-L-I-A-Q-U-E-S-T.com. President Trump's posts threatened to disrupt talks with Iran, but both sides agreed to continue. Plus, yet another British Prime Minister resigns. And we kick off a new series looking at how to fix the U.S. housing shortage. Housing really dies a death by a thousand cuts. If you say, like, you know, this housing proposal needs to fix every problem. It needs to provide housing, but it also needs to make sure it fixes all the traffic problems in our town, then builders will just simply pull out. It's Monday, June 22nd. I'm Daniel Bach for the Wall Street Journal, filling in for Luke Vargas, and here is the AM edition of What's News, the top headlines and business stories moving your world today.

In the UK, Keir Starmer has announced he's stepping down as Prime Minister. The question my party is asking now is whether I am best placed to lead us into the next general election. I have heard the answer of my parliamentary party to that question. And I accept that answer with good grace. Every decision I've taken... has been about putting the country I love first. That is why I will resign as leader of the Labour Party. Keir Starmer's decision comes just days after former Greater Manchester Mayor Andy Burnham was elected to Parliament on a promise to launch a leadership challenge to oust Stommer and shake up the ruling Labour Party. I have spoken to His Majesty the King this morning to inform him of my decision. I will ask the National Executive Committee of the Labour Party to set out a timetable with nominations opening on the 9th of July and completed by the summer recess. Labor is trailing Anti-immigration Party Reform UK in public opinion polls, but Burnham says he could beat the right by returning to Labor's working class routes and avoiding the division that has marked U.S. politics in recent years. Everyone knows that politics isn't working. Everyone can feel that the country isn't where it should be. Tonight could, just could, be the turning point. Keir Starmer is the sixth Prime Minister in the past decade to announce an early departure. China has imposed trade restrictions on dozens of U.S. entities, including banning exports of Chinese-made products with potential military applications to 10 U.S. defense firms. The inclusion of two rare earth producers, MP materials and USA Rare Earth, also suggests China sees an advantage in limiting U.S. capabilities around materials needed for advanced electronics, defense systems, and renewable energy technologies. China is also targeting drone, robotics, and aerospace companies tied to the military. The move follows the Pentagon's decision earlier this month to add a number of Chinese companies to its blacklist of entities it said were linked to China's military. And in Colombia, supporters of far-right populist Abilardo de Lispreya are celebrating his narrow win in the country's presidential election.

The flamboyant lawyer holds U.S. citizenship and was backed by President Trump after promising a crackdown on cocaine gangs and drug trafficking networks. The result is expected to be challenged in the coming days with Esprea and the far left candidate Ivan Sepeda less than 1% apart in the vote share. If confirmed, it marks the 7th Latin American country in three years to have swung to the right. Coming up the first episode of our series on potential solutions to the U.S. housing crisis. After the break, Luke Vargas looks at the persistent zoning tug of wars playing out coast to coast. This podcast is brought to you by ReliaQuest. Cybercriminals are constantly attacking. They want your data. They want your identity. They want your innovation. RelyQuest fortifies your business with agentic defense, AI that detects, contains, and eliminates cyber threats in minutes. It helps your security team move faster at the work that matters most to protect the business now and delivers insights to help them predict what's next. RelyaQuest. Agentic Defense for the Enterprise. Learn more at ReliQuest.com. That's R-E-L-I-A-Q-U-E-S-T.com. California has said yes to building more homes. Several estimates put its housing shortfall at or above 2.5 million units, and state lawmakers have passed bills to help get projects approved, especially if they're near public transit. But not far from Menlo Park Station, where express trains whisk commuters to San Francisco in just 40 minutes, it's clear that the state's YIMBY movement still has plenty of work to do. For years, this leafy suburb home to Meta has been trying to build 345 housing units for what are deemed very low-income households. For a family of four, that's an annual salary of between $60,000 and $93,000 a year. And where they be built is over three downtown parking lots. It's stunning, isn't I? I imagine. I met up with Liora Tanwatko Ross, the California director of Yimbi Action, Menlo Parks, Lot 3. It's sort of a back alleyway, right? You can see those. those lines of trash bins, right? This kind of like the service entrance to all of these places. And it's really just ripe for new buildings and places to live. I mean, if you look up, we could go up. Absolutely, we could.

Proposals from three developers envision replacing lot three with a multi-story car park with apartments at the top, but many local businesses aren't buying it. We are very, very dependent, of course, as a grocer on parking. Third-generation grocer Richard Drager supports affordable housing at alternate sites, saying that shoppers put off by years of construction and parking disruptions would take their business elsewhere. What I see is that every single parking space is... represents a certain percentage of your sales. When you take away 50%, Now try to make ends meet. If you look at this downtown and you compare this downtown with most downtowns, you don't have the Fortune 500 group of retailers. So what happens, unfortunately, as these small independent businesses get pressured, who takes over that aspect of the market? It's another big chain operation. Outside his supermarket and in shop windows around Menlo's distinctively old school downtown are signs to save downtown Menlo, backing a November ballot measure aimed at stopping any repurposing of the parking lots without a public vote. Should it pass, Tanwatko Ross predicts a lengthy fight with YIMBY groups suing if development plans are delayed again, wasting time and money as the housing shortage remains unaddressed. Housing really dies a death by a thousand cuts. If you say, like, you know, this housing proposal needs to fix every problem. It needs to provide housing, but it also needs to make sure it fixes all the traffic problems in our town, then builders will just simply pull out. Well, to help us unpack zoning's role in the U.S. housing shortage, I'm joined now by Journal Residential Rental Market and Housing Policy Reporter Rebecca Pachodo. Rebecca, what is the outlook around getting housing built at the local level? Some big cities, obviously have been trying to tackle their longstanding barriers to new construction. Obviously, California there. I came across plenty of groups that have YIMBY in their name. It's a moniker that's kind of in vogue now. New York's mayor proudly embraces it. I also heard from campaigners that there are basically more avenues than there have ever been for people to object to new housing as well. Yeah. So lots of local jurisdictions are experimenting more with building housing much more than they did a generation ago. As you saw in Menlo Park, lots of these local areas are trying to figure out how to balance incentives versus regulations. For instance, in Minneapolis, Minnesota, we've seen that city successfully usher in a huge wave of new apartment construction with the passage of its Minneapolis 2040 plan. This is basically a 20-year housing plan to ease a home.

of different zoning restrictions, eliminate single family zoning and parking minimums, and make it easier to build near transit. We've seen similar success in New York City with the city of yes rezoning, which is widely considered one of the most comprehensive overhauls of the city's zoning program in decades. So you're seeing success, especially when it comes to relaxing some of these age-old zoning laws. And you're also seeing some of these experiments have unintended consequences in Portland, Maine. Developers have actually slowed down there. building, and they credit that at least partly because of the city's, quote, inclusionary zoning requirement. And as interest rates and construction costs rise, developers are now saying that these affordability requirements have become financially untenable. Rebecca, it's a great example, that Portland one, a reminder that unless cities are actually the ones building the housing themselves, they're reliant on developers who need to see it to be financially worth their while to be putting in proposals. Just staying with the factors maybe favoring more development. What kinds of policies are more immediately actionable if a city, town is trying to get more projects built? Yeah, I mean, one of the most common routes we've seen so far has been this approach of lighter touch density, allowing for more duplex construction or allowing for more accessory dwelling units on properties, adding to the housing stock without fully transforming what a neighborhood looks like. In California has made a huge push to ease restrictions to build those ADUs. It's something that allows you to circumvent this aesthetic pushback that you might get if you're trying to build an apartment building, this lighter touch density approach. which works best and most effectively in places like a Wichita, Kansas, where you have large stretches of land that people are able to build on because this allows developers to... manage the increase in their construction costs, build two homes on one lot, get two streams of revenue where they would have previously only had one. On the NIMBY side of the ledger, is it the same old arguments you're hearing against new construction or, I don't know, is some rethinking of how things are built leading to a rethinking of... lines of argumentation to try and stop those proposals. Yeah, I mean, there are many reasons. Many of these reasons are the ones we've heard for decades. It's the aesthetic pushback. It's the traffic constraints. It's the feeling that a city doesn't have the infrastructure to support new population that housing boom might bring in. You're also seeing many developers experiment more with factory built housing because it's easier, cheaper, faster to build and the technology has really advanced. But these are not always architectural masterpieces, these modular apartment buildings and modular homes. So you tend to see some resistance to that aesthetic disruption. The cookie cutter blocks of new apartments. Exactly, exactly. But at the end of the day, it does get the housing built more quickly. And I think the technology is advancing in a way to try to make them a little prettier. But it's a work in progress. Finally, do you see a factor here on the NBiside, on the NIMBY, gaining in importance likely to...

tip the scales in this housing battle. going forward? Yeah, I think as we head into the early voting season for the midterms, affordability is at the top of every elected official's mind. And as a result, every politician who is campaigning for office this November wants to show that they have a victory on housing. This is now a political priority for many lawmakers in Washington. And driving the affordability conversation is a sense that high housing costs are now reshaping the life milestones of the average American. And so as a result, I think elected officials feel much more pressure. from voters to get this house in order. Reporter Rebecca Pachoto covers the residential rental market and housing policy for us at the journal. Rebecca, thank you so much. Thank you so much for having me. Luke Vargas reporting there on rezoning efforts around the U.S. For more on that, check out the Your Money Briefing podcast. And do tune in tomorrow where we'll be looking at how labor availability and affordability concerns are pushing a rethink of what homes look like and how they're built. If any of this is leaving you with burning questions about the current crisis in the U.S. housing market, we'd love to hear from you. Send us a voice memo to WNPOD at WS.J.com. or leave a voicemail with your name and location at 212-416-4328. Journal Real Estate editor Craig Carman will be answering those questions at the end of the week. And that's it for what's news for this Monday morning. Today's show was produced by Hattie Moyer. Our supervising producer is Sondra Kilhoff. And I'm Daniel Bach for the Wall Street Journal. We'll be back tonight with a new show. Until then, thanks for listening.

This podcast is brought to you by ReliQuest. Cybercriminals are constantly attacking. They want your data. They want your identity. They want your innovation. RelyQuest fortifies your business with agentic defense, AI that detects, contains, and eliminates cyber threats in minutes. It helps your security team move faster at the work that matters most to protect the business now and delivers insights to help them predict what's next. RelyaQuest. Agentic Defense for the Enterprise. Learn more at ReliQuest.com. That's R-E-L-I-A-Q-U-E-S-T.com.