Adobe Stock/Gary

A reason we don't see more innovation in home building, development, residential investment, etc. that could improve productivity and "bend the cost curve" to lower home prices and rents?

Too many believe improved productivity wouldn't matter.

Too many believe that working American households' access to quality housing options they can afford is a political issue, not a business issue.

And too many believe that putting effort into trying to turn the tide of political will toward more development of more housing for more moderate household income levels is fighting a losing battle in more communities every day, not less. Not worth the energy.

Even as an opportunity to leverage technology and data to modernize, improve, and suck wasted money, time, and labor expense out of the building process becomes more and more real, counter-forces gain traction at an even faster pace.

Those forces--NIMBY activism, locally elected officials and appointed agencies, and other influencers of land use regulation, cost, and the peril of investment loss in municipalities and counties large and small impact prices, rents, and risks separate and above operational efficiencies that even the most advanced construction technology could yield.

In the minds of many of our builder firm leaders, affordability is not an "us" issue, it's a "them" issue.

In the minds of a few, however, housing affordability--being able to build it profitably as well as being able to sell or rent it to people whose take-home wage is the dominant source of household wherewithal--is core to both business model and value proposition.

For those few, land use constraints, restrictions, exorbitant fee structures, intolerable delays, and risks of failing the entitlement process, are not externalities. They're what these firms do.

Political will--Silicon Valley's technology elite has suddenly discovered--is not an externality that can be either ignored or expected to tilt forever in one's favor. It's a business condition. The don't-ask-for-permission but beg-forgiveness-later honeymoon era for technology organizations--as cool as they are--may have ended.

When it comes to residential investment, development, and construction, political will is and has been a business condition. Yes, in many cases and in many markets, it's a business factor that adds 30% to 45% to what buyers or renters pay per square foot of living space.

The issue for those vested in housing development is what percentage of that 30% to 45% factor in what households pay is an "opportunity area?" In other words, were developers able to effectively sway political will--the NIMBYs, locally elected officials, the opponents to any and all forms of more housing affordability in those municipalities--how much of that 35% to 45% could be taken out of a square foot's cost and given back to the buyer or renter in a price reduction?

Jenny Schuetz, Brookings Institution David M. Rubinstein Fellow at the Metropolitan Policy Program, has been writing about what it takes to "turn the tide" of opposition to housing development in localities, and focuses on "carrots and sticks" approaches national policymakers can take to trying to sway political will to favor more attainable housing.

Schuetz notes that those efforts--whether they're a carrot or a stick--need to meet two conditions to stand a chance of success.

First, the incentives should be large enough to attract participation by the targeted localities: communities that would offer low- and moderate-income families substantially better opportunities often have the most exclusionary zoning. Wealthy suburbs like Westchester County, N.Y., and Mount Laurel, N.J., can’t be bribed with peanuts. Second, financial incentives need to require that local governments deliver better housing outcomes, not merely change their zoning on paper. Receipt of federal funding should be tied to increased production of lower-cost housing. Massachusetts, California, and New Jersey have decades-old laws requiring localities to produce their “fair share” of region-wide affordable housing, yet most affluent communities still fall far short of housing production goals. Exclusionary-at-heart localities have mastered evasive tactics, such as adopting “inclusionary zoning” policies—but building little or no affordable housing as a result.

Schuetz goes further in another analysis, on why "HUD can't fix exclusionary zoning by withholding CDBG funds," essentially pointing out that this initiative proposed by HUD Secretary Ben Carson is the wrong lever to use to get high opportunity markets to accommodate more housing development for moderate to lower income households.

Importantly, Schuetz shines a light on three action items--albeit directed at HUD, but which can be adopted and applied as well among private sector vested players in residential development.

Here they are:

1. Use the bully pulpit.
When the HUD Secretary speaks on an issue, he draws attention from a wide audience, including media, affordable housing advocates, real estate industry members, and local governments. He shouldn’t underestimate the power of the bully pulpit. Explain how restrictive zoning harms not just low-income families but regional housing markets. Name and shame worst offenders, or applaud cities that have undertaken zoning reform. Provide direct guidance on what specific zoning practices should be changed.

2. Tap into HUD’s existing research and expertise.
Secretary Carson’s speechwriters have a wealth of internal expertise to draw upon in developing his speeches. For more than a decade, HUD has conducted, compiled, and published research on land use regulations. HUD’s in-house researchers in the Office of Policy Development and Research could deploy their considerable expertise to help HUD better focus its efforts.

3. Convene key players and have an honest conversation about political realities.
Another one of HUD’s unique strengths is its ability to convene discussions among state and local government officials (even those who don’t receive HUD funds directly). Over the past year, innovative approaches to zoning reform have bubbled up across states and localities. If HUD really wants to tackle the NIMBYs, it should start by putting all the players in the same room, and encourage them to move past the political stalemate.

If we can take anything away from the recent comeuppance Facebook, Google, Apple, and Amazon are facing as Capitol Hill cracks down on their disregard for many rules of engagement, it's that local political forces are part and parcel of the proficiencies companies must bring to the table to succeed.

If developers, investors, builders, property owners, and management companies are going to "move past the political stalemate," they must be good at two basics of negotiation. One is to understand what they other side "really wants." The other is to be as willing to be persuaded as to persuade.

Come Nov. 28-29, to Austin's J.W. Marriott, to Hive, where our laser focus will be on "innovative approaches to zoning reform" and how residential investment and development stakeholders nationwide can learn from them, adopt them, and put them into action in more communities around the nation.