Dave Amos doesn't just recount the history of American housing; he dismantles the comforting myth that affordability is a natural market condition that simply vanished. By tracing a direct line from the car-driven boom of 1925 to the financialization of the 1970s, Amos reveals that the current crisis is not an accident of economics, but the result of deliberate policy choices and shifting cultural values. This is a rare historical autopsy that explains why the "American Dream" of homeownership has become a financial trap for the modern generation.
The Lost Era of Abundance
Amos begins by upending the assumption that housing scarcity is a modern phenomenon. He points to 1925 as a peak of construction, driven by a technological shift that feels eerily familiar today. "Prior to 1925, most housing booms were regional as new cities sprung up in the expanding United States. But in 1925, housing was being built in, or should I say around, just about every city. The reason was simple, the car." The author argues that the automobile unlocked vast tracts of land, allowing supply to meet demand in a way that kept prices accessible. This historical context is crucial because it proves that high density and high cost are not inevitable; they are the result of a specific regulatory turn.
However, the author notes that this era of abundance was fragile, built on a precarious financial foundation. "The home loans back then did not resemble today's 30-year fixed rate mortgages. Loans of the 1920s were short, often 5 years, variable rate, and required a 50% down payment." When the market crashed, these balloon payments triggered a collapse that the Great Depression exacerbated. The lesson here is stark: without long-term, stable financing mechanisms, even a massive supply boom can turn into a bust. Critics might argue that the 1920s boom was speculative by nature, but Amos effectively uses it to show how quickly the market can swing when credit conditions change.
The Zoning Pivot and the Rise of Exclusion
The narrative shifts to the 1926 Supreme Court case Village of Euclid v. Ambler Realty Company, a decision that fundamentally altered the American landscape. Amos explains that before this ruling, cities were hesitant to regulate land use, fearing it would violate the Fifth Amendment's takings clause. Once the court validated zoning, the door opened for local governments to dictate not just what could be built, but how much. "Zoning is about more than just separating incompatible uses. It includes development standards that dictate lot size, building heights, lot coverage, and that sort of thing." This is where the author identifies the first major fracture in housing affordability: the ability of municipalities to legally restrict supply.
The post-World War II era saw a massive construction boom, led by developers like William Levitt, who treated housing like an assembly line. Amos highlights the sheer scale of this production: "Houses were built by the thousands and built affordably. A new house cost just over $100,000 in today's dollars." This period also saw the federal government revolutionize financing, extending loan terms from 5 years to 30. "30-year mortgages make for smaller monthly payments, which puts home ownership within reach for more people." The result was a dramatic spike in ownership rates, climbing from 43% to 65% by the 1960s. Yet, this success came with a hidden cost. The author points out that public housing policy, particularly the Housing Act of 1949 and 1954, was co-opted for "urban renewal," which often meant demolishing existing communities to build sterile blocks or commercial centers. "US public housing policy did little to actually increase the supply of housing and largely concentrated poverty." This is a critical distinction: the government helped build single-family suburbs for the white middle class while systematically dismantling affordable options for everyone else.
Housing policy was built on racist foundations, and we never tore them up. We just stopped talking about it.
The Inflection Point: 1970 and the Financialization of Home
The most compelling part of Amos's argument arrives at the 1970s, which he identifies as the true inflection point where housing stopped being a place to live and started being an asset class. "Prior to 1970, the market behaved kind of normally. If housing prices started increasing, it implied that there was demand for more housing and housing construction increased. But after 1970, prices started to rise a little faster than you'd expect." The author attributes this decoupling of price from construction costs to the rise of "NIMBYism" (Not In My Backyard) and the financialization of real estate.
Amos argues that after the Fair Housing Act of 1968 outlawed explicit racial discrimination, exclusionary practices simply evolved. "NIMBYs at the time figured out that they could oppose multifamily housing and enact zoning regulations that made it impossible to build anything but upper income homes available primarily to white residents." By mandating large lot sizes and banning density, communities effectively priced out lower-income families without using the language of race. This shift was reinforced by a cultural change where homeowners began to view their properties as investment vehicles. "When you start paying attention to property values, you start wanting to ensure that your property values continue to go up." This mindset created a political feedback loop where residents actively fought against new construction to protect their equity, turning neighborhoods into fortified enclaves.
The rise of Real Estate Investment Trusts (REITs) further accelerated this trend, allowing Wall Street to treat housing as a commodity to be traded rather than a necessity to be provided. "Financialization also attracted investors and Wall Street. This actually technically began in the last era when the federal government allowed for the establishment of something called real estate investment trusts or REITs back in 1960. But they really grew in this era." The author's analysis here is particularly sharp: it connects the dots between local zoning battles and global capital flows, showing how a local decision to ban an apartment building can have macroeconomic consequences.
Critics might note that Amos places significant blame on local activists, potentially underestimating the role of federal monetary policy and the broader stagnation of wages in driving unaffordability. While the NIMBY factor is undeniable, the inability of workers to keep up with housing costs is also a story of income inequality that the piece touches on only briefly. Nevertheless, the argument that local policy has become the primary barrier to supply is well-supported by the historical trajectory Amos lays out.
Bottom Line
Dave Amos's strongest contribution is reframing the housing crisis not as a failure of the market, but as a success of policy—specifically, policies designed to restrict supply and protect asset values for a select few. The piece's greatest vulnerability is its relative silence on the role of global capital and the sheer scale of corporate consolidation in the rental market, which operates alongside the NIMBY dynamic. Readers should watch for how current federal zoning reform efforts attempt to undo the 1970s legacy of exclusion, as the battle lines are being drawn exactly where Amos predicts.
The 1970s didn't just change how we build; they changed what a house is for. It stopped being a home and started being a stock.