Last week, with help from two sources, here and here, we lit on the defining predicament for home builders and residential developers in 2016 and beyond.

To meet a critical market need, namely young adults' housing choices, they're caught between a rock and a hard place. The rock, in this case, is local regulations and impact fees that layer like a cynical capital stack that amounts to a quarter of home buyers' cost on top of each home developed, designed and built. The "hard place" is expressed in Federal Housing Administration loan limits that quash attainability for would-be home buyers of constrained means.

A normal, perhaps even typical, reaction in our community would be finger-pointing and--perhaps fairly--placing of blame at the feet of faceless, nameless "regulator," bureaucrats in federal, state, county, and municipal office, alas, without much effect. This reaction would be understandable, and often enough in the past it was vindicated by a business cycle that gained a toe-hold and took on momentum that defied the forces opposed.

That reaction may be one home builders and developers know by heart, but it would be mistaken.

Blame may feel gratifying, momentarily, but, while it may work to make some feel worse, it rarely, if ever works to make things better for anybody. And, it would seem, unfortunately, that the regulatory burden and impact fees part of the equation here is only going to grow in magnitude, not shrink.

In our own Builder 100 research, we see this astonishing pattern playing out. Among the Builder 100/Next 100 set of 200 builders, only three of them say that 50% or more of their closings aimed at "entry-level" buyers, down from 11 home building firms who reported the same in 2009. Meanwhile, one out of two of our 200 home building enterprises report that 50% or more of their closings were to move-up buyers, the discretionary, "have"-type buyers.

So, we'd agree with Ivy Zelman that the first line of action would be to collectively and assertively lobby the Federal Housing Finance Administration and the Department of Housing and Urban Development, overseers of Fannie Mae, Freddie Mac, and the FHA to re-look and lift the ceilings for conventional loans in markets and submarkets, to allow more young people both the reality and the realistic dream of homeownership in those markets and submarkets.

Per BUILDER sibling Metrostudy, builders closed 430,000 single-family for-sale units in 2015. Even though that's double what happened during the worst years of the downturn, it's still only less than half of what most housing experts would say is a normal market for new communities and replacement homes.

That missing 430,000 to 450,000 new homes might be about the size of the current hole in the broader economic recovery--measuring another 1.7 million in jobs that would come with that level of production, as well as $123 billion in local income, not to mention the $37 billion in fees, taxes, permits, assessments, and obligations.

It's time to get beyond reference to those potential home buyers as pent-up demand. They are the nation's next generation of community makers, developers, and leaders whom we will look to and depend on for decades to come.

Right now, there are 400,000 or 500,000 prospective buyers in the unmet need universe. Only a few, literally, are making it their business strategy to try to meet those needs. Those few will be among the fastest-growing builders in the nation in 2016.

But, for others, the time to act--to push the FHA to change loan limits in at least some markets where it's currently economic foolishness to build for entry-level buyers--has come.

In a Wall Street Journal article last week Colorado-based Oakwood Homes ceo Pat Hamill noted that "having a first-time home buyer market is very, very, important," adding, "I don't know what happens when you take that segment out of the marketplace."

We don't want to know.