Housing costs: Is deregulation the answer?

The area a little north of the Capitol “has added more new apartment units since 2017”

(Image credit: Bonnie Jo Mount / The Washington Post via Getty Images)

published 11 September 2025

A flourishing Washington, D.C., neighborhood has seen an explosion of apartment building that may offer lessons in how to address the nation’s housing crisis, said The Economist. Once known as Swampoodle and now called NoMa, the area a little north of the Capitol “has added more new apartment units since 2017” than any other ZIP code in the U.S., according to data from Yardi, a real estate software company.” Get off the Washington metro there, and you’ll be “barraged by ‘Now Leasing’ signs boasting rooftop pools, full-featured gyms, and one-month-free rental offers.” Prices in Washington aren’t exactly cheap, but they are “at least less exorbitant than East Coast peers like New York or Boston.”

The YIMBY—“yes in my backyard”—movement wants to claim what’s happening in D.C. as a victory, said Brian Shearer in the Washington Monthly. And indeed, the city is now “building more housing per capita than Houston.” But it hasn’t done it through deregulation. The city created housing loans, built mass transit to create new neighborhoods, traded zoning exceptions for cheaper housing, and purchased and bundled lots to lease to developers for big projects. All this has happened without the policy changes that the YIMBY cohort keeps pushing. “Perhaps surprisingly, the wide-ranging effort didn’t include uniform city-wide dezoning, upzoning, or permitting reform.” That undersells the pro-housing movement, said Ron Davis in The Atlantic. It’s not just about “a specific set of regulations” but a “populist” movement that challenges vested interests. Progressives and other foes of market-rate housing want to write off the YIMBYs as conservatives. But there’s nothing inherently conservative about “a push to lower housing costs.” In fact, the battle over zoning regulation doesn’t follow traditional political lines at all, said Derek Thompson in his Substack newsletter. Look at Dallas. As the city has been built out, it has been burdened with more rules, such as minimum lot size requirements, that discourage smaller, cheaper housing. Predictably, home prices in Dallas have doubled. “Texas NIMBYs now sound just like their California counterparts when you get them in a room with city councils, just with jauntier twang.”

The bad news for just about everyone who thinks about housing is that interest rate cuts are not coming to homebuyers’ rescue, said Sydney Lake in Fortune. Historically low mortgage rates during the pandemic—some below 3%—soared to more than 8% in late 2023 and still hover around 6.5%. Those high rates are a key “facet of the housing affordability crisis.” For a typical home to be affordable to the average buyer, rates need to drop to 4.43%, according to an analysis from Zillow—a decline that’s “currently unrealistic.”