Single-Family Homes Don’t Fulfill
Everyone’s Dreams – Or Budgets
By Thomas Irwin | March 28, 2025
As the father of two young children, one of my primary roles is to be a sounding board for all kinds of desires from my children. These run the gambit from the ordinary and costless to fulfill – like refilling their water bottle – to the less advisable, like when they request a second bowl of ice cream. Saying “no” often elicits a series of protests, where my children express just how badly they want the second bowl. I have developed a habit of responding, “Yes, and I want a Tesla, but we cannot always get what we want.”
I tell this short anecdote because of a recent article in The Federalist decrying the influence of “New Urbanism” on cities. I am not a member of any organization that uses that label, so I do not usually feel the need to write a response. One of the authors is a former official in the first Trump Administration, so I think it’s worth taking its piece seriously. I found one assertion particularly odd: the authors make assertions about the housing that Americans supposedly want but little time discussing the primary mechanism we use to gauge wants in a market society: prices.
In his famous essay “The Use of Knowledge in Society,” F.A. Hayek had the key insight that prices are fundamentally the most important information that determines how societies’ resources are allocated. I may want a Tesla, but is my want enough to cover the cost? My wife may want to spend the whole summer touring Europe, but does she want that enough to forgo saving money for retirement? Hayek’s core insight is fundamental for economics: without considering prices, knowing how to allocate scarce resources is impossible.
Returning to The Federalist piece, it is incredibly naive to assert that Americans “really want” single-family homes without giving space to the practical reality of those homes’ prices. While the piece’s authors may be unbothered by the prices of homes, most American families consider the cost of housing in their city every month. For everyone but the uber-wealthy, weighing the cost of housing means making compromises, both by living in a home that is short of their ideal and by cutting back elsewhere to afford that home.
This is where the authors can learn from housing advocates: allowing for a wider variety of homes is the most critical way to bring residents’ housing realities closer to their ideals. Consider that for anyone living in a city or inner-ring suburb, a townhome built on a small lot is far cheaper than a single-family home. Consider Houston, where suburban land is relatively plentiful, a townhome’s median cost is far more affordable ($242,617) than the average single-family home with a large lot ($418,903). Given this immense cost difference, it is unsurprising that when the city dropped the legal prohibition of building houses on small lots in 1998, over 80,000 townhomes were built and bought by city residents.
The rapid expansion of these options has kept Houston one of the most affordable places to buy a home, as these small-lot homes were constructed inside and outside the city’s beltway. Families’ preferences do not neatly map onto urban vs. suburban culture wars but instead onto banal concerns like affordability and proximity to jobs. The authors of The Federalist piece may have some rhetorical gymnastics to explain this away. Yet, the simplest explanation is that when you legalize various types of homes, families’ ideals change to embrace the potential of high-quality and lower-cost options.
Where I live in Los Angeles, there is a far greater potential for townhomes. The city’s median single-family home prices hovers near $1 million, and for many homes, 70% to 80% of the cost is tied up in the cost of land. So why is Los Angeles not building townhomes? Not because families do not want to buy them – but primarily because the city bans building single-family townhomes on small lots on 74% of its residential land. In Southern California, more broadly, these homes are prohibited on 78% of the residential land.
My wife and I spent several years weighing the choice to buy a home. We quickly realized that while a single-family home in Southern California would be lovely, we would never afford it on our income without making compromises we could not make elsewhere. However, we thankfully realized that we could achieve homeownership by buying a duplex with a friend, thus reducing the cost of homeownership by about 50% over a single-family home. While co-owning a duplex does not come with all the perks of a single-family home, we have managed to preserve the ones that are most important to us, like long-term stability and the opportunity to customize most of our own space, while not having to compromise our values elsewhere financially.
Walking down my neighborhood also dispels a key misconception about more flexible zoning arrangements: the belief that flexibility will eliminate the traditional single-family option. While our street is zoned R-2 and allows for duplexes, the reality is that a good deal of single-family homes have still been preserved on the street. This is because zoning codes only apply their restrictions in one direction: in areas where multi-family zoning is allowed, people who prefer to live in a single-family home still have the opportunity to buy one. Yet the single-family areas foreclose any other option to homeowners or renters.
Would the authors of The Federalist piece want to deny my family the opportunity to make the same creative housing choices in their city or neighborhood? Do they not trust ordinary American families with choices to be able to pick which option best suits their needs? Or, is it the case that advocates for the “suburban lifestyle dream” are everyone’s worst nightmare: the neighbor who has nothing better to do than try to exert control over their neighbor’s choices?
Thomas Irwin is a writer who works in the faith-based economic development field. He has worked with several housing and economic advocacy organizations in the region, and lives in East Los Angeles with his wife and two kids.
