Complaints about high housing costs are widespread. Economists have one simple answer to bring prices down: Build more houses. Increasing the supply of housing to lower the price of owning or renting is not only theoretically sound, but it’s backed by strong empirical evidence.

A 2020 paper from the Philadelphia branch of the Federal Reserve studied the impact of new apartment buildings on rents in low-income areas. The authors analyzed nearly 1,500 new buildings with 50 or more units that were constructed in 11 major cities between 2010 and 2019. They found that rents in the local area fell by at least 5%.

A more recent study looked at housing supply in Austin, Texas. From 2010 to 2019 rent in the city nearly doubled. To counteract this, the city changed several policies in 2015 to make it easier for developers to build more housing. About 120,000 new units were built in Austin between 2015 and 2024. Rents started to fall in 2021, when the city’s rents were 15% higher than the national average. By January 2026, they were 4% below that mark.

One way to build more housing and thus lower prices is to change zoning laws. The Biden-Harris administration released a report on housing affordability in 2024. It noted that “[m]ore relaxed zoning restrictions lead to a higher supply of smaller, lower-cost housing, and, in at least some instances, can lead to lower prices and rents or slower growth in rents among existing housing.”

As an example of this, Auckland, New Zealand, eased its zoning restrictions in 2016 for about three-fourths of its residential land. This led to a building boom. Six years later, the rent for a three-bedroom dwelling had fallen by more than 25%.

As political scientist Mike Munger says, “All housing is affordable housing.” If a developer builds one hundred homes worth a million dollars each, the people who move into those houses will move out of the ones they currently occupy. This then frees up one hundred houses that others can move into, and so on down the line. A main finding of a recent review of the academic research should come as no surprise: “Increases in housing supply reduce rents or slow the growth in rents in the region.”

Increasing housing supply even impacts birth rates. A 2024 paper looked at housing prices from 1870 to 2012 in 14 countries and found that higher housing costs decreased fertility. In a 2026 paper, economist Benjamin Couillard looked at more recent evidence from the United States. He concluded that rising housing costs since 1990 caused about 13 million fewer births between 1990 and 2020. About half of the fertility decline from 2000 to 2019 was caused by high housing prices, he estimated.

As fertility rates fall, that puts fiscal pressure on many government programs, which can increase the tax burden on everyone. Most innovations come from younger generations, and falling fertility rates can lead to less entrepreneurship and declining productivity.

This future need not come to pass. Reforming zoning regulations and other legal restrictions can free builders to construct more homes. This will make housing more affordable. Other states build more than Michigan, and we need to catch up not just for today but for the future.

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