How Urban Sprawl Is Weighing Down on the U.S. Economy

America’s suburbs are expanding again. During the 20th century, developers built vast tracts of single-family homes outside major cities. Builders followed mortgage underwriting standards first introduced by the Federal Housing Administration in the 1930s. Over the century, those guidelines created housing market conditions that explicitly excluded many minorities. Experts say it’s possible to update these old building codes to create equity while solving some, but not all, of the problems facing America’s suburbs. Last year, single-family home starts hit 1.123 million, the highest level since 2006, according to the National Association of Home Builders. But options for potential buyers remain limited. Experts say the problems in the U.S. housing market are tied to past policy decisions. In particular, they say restrictive zoning codes limit the supply of housing. These codes are based on the Federal Housing Administration’s guidelines for underwriting mortgages from the 1930s. According to Ben Ross, author of Dead End: Suburban Sprawl and the Rebirth of American Urbanism, this means “no sidewalks and winding, dead-end streets.” Ross and others say more needs to be done to manage residential development. Ross lives in Montgomery County, Maryland, which recently revised its zoning code to increase population density in the area. The county didn’t have many other options: 85 percent of the buildable land is already developed. Strict zoning laws favoring single-family homes have limited the supply of land available for multifamily construction and hampered the production of more affordable housing. With limited land available for multifamily projects, the price of that land has skyrocketed, making the projects unaffordable for builders. Today’s homebuyers are paying for past urban sprawl by relying on credit to finance their lifestyles. Meanwhile, the cost of maintaining public infrastructure is straining depopulating cities across the country. » Subscribe to CNBC: https://cnb.cx/SubscribeCNBC » Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision » Subscribe to CNBC Classic: https://cnb.cx/SubscribeCNBCclassic About CNBC: From “Wall Street” to “Main Street” to award-winning original documentaries and reality series, CNBC has it all. Discover special previews of your favorite shows, exclusive videos and more. Connect with CNBC News Online Get the latest news: https://www.cnbc.com/ Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC Follow CNBC News on Facebook: https://cnb.cx/LikeCNBC Follow CNBC News on Twitter: https://cnb.cx/FollowCNBC Follow CNBC News on Instagram: https://cnb.cx/InstagramCNBC Subscribe to CNBC PRO: https://cnb.cx/2NLi9AN #CNBC #blackhistorymonth How Urban Sprawl Is Weighing on the U.S. Economy

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