Work & Economy

‘Harvard Thinking’: Priced out of the American dream

Illustrations by Liz Zonarich/Harvard Staff

Samantha Laine Perfas

Harvard Staff Writer

April 1, 2026

long read

In podcast, experts discuss factors fueling housing crisis — from overregulation to NIMBYism — and how to fix it

Last year, home prices surged to nearly five times the median income. It’s no wonder that increasing numbers of middle-class Americans feel like the dream of owning their own home is out of reach.

“When you have robust demand to live in a place that then collides against a relatively fixed supply of housing, you are going to end up having high prices,” said Edward Glaeser, an award-winning urban economist and the Fred and Eleanor Glimp Professor of Economics.

Political solutions can be tricky given the competing interests of housing haves and have-nots, says Jason Furman, the Aetna Professor of the Practice of Economic Policy at Harvard Kennedy School and former chair of the Council of Economic Advisers under the Obama administration. Yet some states have responded creatively to the crisis, according to Amy Tomasso, a director of the nonprofit Ivory Innovations and former research fellow at the Joint Center for Housing Studies.

In this episode of “Harvard Thinking,” host Samantha Laine Perfas talks with Glaeser, Furman, and Tomasso about factors driving the housing crisis — and their prescriptions for fixing it.

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The transcript

Edward Glaeser: The people who own their homes? The rise in housing prices isn’t a problem for them. It’s an increase in the price of their most valuable asset, and they’re benefiting from this stuff. But it’s the outsiders who pay the price.

Samantha Laine Perfas: Homeownership has played a central role in the American concept of wealth and stability, but the dream is feeling more and more unattainable for many middle-class Americans. Last year, home prices surged to nearly five times the median income. Yet the pace of new housing builds — which could create more affordability — remains slow. So if existing homes feel out of reach and there aren’t enough new homes being built, what does that mean for the people hoping to buy?

Welcome to “Harvard Thinking,” a podcast where the life of the mind meets everyday life. Today I’m joined by.

Glaeser: I’m Ed Glaeser. I’m the Fred and Eleanor Glimp Professor of Economics in the Department of Economics in the Faculty of Arts and Sciences.

Laine Perfas: He is an award-winning urban economist and has written hundreds of papers on cities and infrastructure. Then:

Amy Tomasso: I am Amy Tomasso. I’m the vice president of policy and partnerships at Ivory Innovations.

Laine Perfas: Ivory Innovations is a University of Utah-based nonprofit that seeks to catalyze innovation in housing affordability. Amy studied at Harvard’s Graduate School of Design and was a research fellow at the Joint Center for Housing Studies. She holds a master’s from Harvard. And finally:

Jason Furman: Jason Furman. I’m the Aetna Professor of the Practice of Economic Policy at Harvard Kennedy School.

Laine Perfas: He’s also a professor in the economics department and served as chair of the Council of Economic Advisers under the Obama administration.

And I’m your host Samantha Laine Perfas, a writer for The Harvard Gazette. Today we’ll talk about homeownership and how the housing market affects the economy, our communities, and people’s pursuit of the American dream.

I’m going to start with a question that could be the only question for this whole episode: Why is it so difficult to buy a home right now, specifically in high-demand areas?

Glaeser: You don’t go wrong starting out with supply and demand, right? When you have robust demand to live in a place that then collides against a relatively fixed supply of housing, you are going to end up having high prices. First, the supply of new houses dried up in places like Boston and New York and coastal California, and increasingly places that used to be superstars of production — like Atlanta, Georgia, Phoenix, Miami — became places in which building has also radically slowed down. An increasingly large swath of America has faced a housing supply that has been straitjacketed. And the upshot is housing costs far more than it should.

Tomasso: A short answer I would give to why it’s so hard to buy a home is that it’s hard to build a home. This isn’t a new story. Housing starts have declined over the last 30 years. While we’re in an acute housing crisis now, it’s been in the works for quite some time and estimates show that we’re around 2 to 4 million homes short of where we need to be in the U.S. There’s this perfect storm of contributing factors: the overlapping regulations; demand has created high home prices; we’re also seeing high interest rates, high insurance premiums, and property taxes. All of this amounts to the lowest levels of home-buying since the mid-’90s.

Furman: I want to pick up on the high interest rates that Amy just mentioned. The fact that the United States is running the largest budget deficit of any of the rich countries in the world — it now has a debt equal to the size of our economy — you may wonder why should that matter for housing? It drives up interest rates. When interest rates go up, it affects both supply and demand. If you’re trying to build houses as a builder, it’s harder for you to borrow money when you’re competing with the federal government. And, of course, it also affects the demand side, which is mortgage rates today are 6 percent. For some people whose memory goes way back, 6 percent sounds like a bargain, but compared to anything you could get from roughly the financial crisis to 2022, 6 percent is a pretty expensive mortgage. You have the federal deficit and debt at least in part to thank for that higher mortgage rate.

Glaeser: Let me echo the supply side of that as well. Boston has many thousands of apartments that have been officially allowed by the city but have not pulled their permits because you have to pay a 1 percent charge to pull your permits. They’re just sitting there because of rising interest rates. The builders, of even these units that have been approved by the city, aren’t willing to go ahead because of the rise in interest rates.

Laine Perfas: OK, so just to be clear, supply equals available homes. Demand equals the people who are wanting to buy those homes.

“You have the federal deficit and debt at least in part to thank for that higher mortgage rate.”

Glaeser: Supply is two things: Supply is both the stock of homes, but it’s also the flow of new homes that are coming in the market. And when we say that the supply is way down, we don’t actually mean that the number of homes is smaller now than it was 25 years ago. We mean that the supply of new homes is radically down and you’ve had a decrease in the amount of new building. To give you an idea of the sort of size of units involved, if we had built between 2000-2020, the same rate that we built between 1980 and 2000, America would have 15 million more homes. That’s how a change in the flow of housing can relate to the change in the stock.

Furman: I wanted to get in a wrinkle about the demand side too, which gets a little bit complicated, which is: Who needs a home? If you are a couple and you have children, you probably need a home. There are a lot of — potentially millions of — pent-up households. The non-technical term for a pent-up household is the adult child living in your basement. Those are people who, in a different environment, might be in their own housing unit but because it’s so expensive and unavailable, they’re staying at home and in your basement. There are all these different concepts and ways of measuring housing shortages but an important part of it isn’t just the person who needs a house. It’s the person who temporarily has given up, has found something else, but in a different world, they probably would be out of their parents’ basement.

Glaeser: Another layer of that is what I call this real estate gridlock, where people are in homes that are not calibrated to their stage of life or their preferences. And we see this a lot with older adults where they’re in maybe too-large homes, but they’re locked into these below-market mortgage rates and they’re disincentivized to sell; also because there aren’t smaller, more age-appropriate options to age-in-place on the market. This kind of missing middle we talk about of duplexes, triplexes, smaller-home types.

Laine Perfas: So just thinking about my situation, I’m married with two young kids living in Boston and trying to even think about buying a home just feels impossible. It’s something we laugh about and we’re like, maybe someday. But I know a lot of people in my demographic who are in the same boat, and there’s this constant debate about whether you just need to suck it up and put all your finances into buying a home or if you should keep renting and just accept that you’re going to be renting forever. It brings me to a question that I’ve had, which is: Is it so bad to rent? Why is it that we have this fixation on homeownership?

Glaeser: No, it’s not bad to rent. It’s important that America have plenty of available rental property. The problem is that — as you know probably better than I do — renting is also pretty darn expensive. The old rule was if you expect to be in the same unit for about seven years, that’s when it made sense for you to switch into owning. Whereas if you expect to be moving around every two or three years, that’s when you should be renting — you should be basing it on that, not on anything else. But as I think about younger people, the way that I think about this is, it relates to a view of the world that Mancur Olson had 45 years ago when he described “The Rise and Decline of Nations” and he described a world in which, in stable societies, insiders figure out how to work the system so that outsiders pay the price. Now, when I read this in the 1980s, I thought, maybe that’s kind of California and New York City, but that’s not most of America where you can still find your future, where they’re still building. Forty years later I think he was incredibly prescient because in fact, the people who own their homes, the rise in housing prices isn’t a problem for them. It’s an increase in the price of their most valuable asset, and they’re benefiting from this stuff. But it’s the outsiders who pay the price. And what’s tragic about the web of local land-use regulations that weigh everything down and make it so difficult for younger people to buy stuff is: America should be a country, as Boston should be a city, for outsiders. And yet we’ve become a place in which insiders get to make the rules and outsiders don’t have a room at the table.

Furman: And that’s one reason the politics are so tricky. If you had a vote on whether the poverty rate would go up or down, I think everyone would say down. If you were to vote on whether GDP would go up or down, everyone would vote up. If you have a vote on whether house prices should go up or down, all of a sudden as a politician, you want to promise one group of people that house prices are going up, you want to promise other people that house prices are becoming more affordable, aka house prices are going down, and unfortunately you can’t really have both of those going on at once.

Tomasso: Speaking as a fellow renter, it’s something I hear a lot among my friends as well, that they could rent something nicer than they can buy right now. And the last few years have seen this multifamily rental housing boom. The reality is that two-thirds of home equity in this country is held by people over 55. There’s a huge skew toward the equity-building potential that comes from homeownership. But at the same time, 50 percent of renters in 2023 were cost-burdened. There’s still a huge issue on affordable rental units. And with cuts to federal funding, especially toward lower-income units, it’s a huge problem.

“NIMBYism, I think ultimately comes down to this fear of change. And the thing is, communities are always changing and they’re growing.”

Laine Perfas: I wanted to go back to something, that was brought up, the idea of insiders versus outsiders. When I was looking into this a theme that comes up often is NIMBYism, Not in My Backyard, and how that attitude can affect regulation and new housing builds. How does that play a role in what we’re seeing?

Glaeser: I first started working on this issue about 25 years ago because Harvard was going to build a contemporary art museum on the banks of the Charles, which Renzo Piano, the Pritzker Prize-winning architect was going to design. There were like three guys whose view of the river this would block, and they managed to get 75 signatures which basically stopped the whole thing. This was amazing to me that a very small number of people could block — not a housing project — but a project that presumably would yield both cultural and economic benefits for all of Cambridge. And this is what NIMBYism is in action — you’ve got your thing, and we’ve created a system in which anyone who abuts can shut down almost anything, with certain modest exceptions, and that yields decisions which run very much against either the needs of the whole metropolitan area or the wider needs of people who aren’t at the table. And part of the problem with the young people who might move into Boston — they’re not at the table at all.

Furman: It also raises the issue of what level of government you work on this issue on. I first started actively working on this when I was chair of the Council of Economic Advisers under President Obama, sitting there in the White House reading papers written by Ed Glaeser and his co-authors. This insider-outsider dynamic really depends on the scale at which you’re doing it. If the people who are making the decision are the people on that block, they’re going to definitely decide against building that because they’re the ones whose views are blocked. If it’s all of Cambridge, maybe you build the art museum, maybe you don’t. If it’s all of Massachusetts, now you have 6 million people who can come to the art museum. At the federal level, all of a sudden you have a much, much broader set of people that benefit. I do think local communities making choices — there’s something important to that, but the political dynamic gets very distorted. If you look here in Massachusetts, the MBTA Communities Act was important because it said, rather than each place deciding whether to build more dense housing, if you wanted to get money to be part of the transit network — and basically most of Eastern Massachusetts is on the transit network — you must build density. And what that said is it passed a law at the level of a state. So if you build more density in Cambridge, it might benefit people who would move to Cambridge from Somerville or Everett or some other place. And rather than just letting Cambridge fully make that decision at the state level, you are letting everyone in the state who might benefit.

Tomasso: NIMBYism, I think ultimately comes down to this fear of change: of property values declining, of infrastructure burdens. And the thing is, communities are always changing and they’re growing. And right now with the affordability crisis across the country, communities are sometimes regressing. When teachers, when small business owners, when grocery store employees can’t live in the community, what kind of community is it changing into? And so I think framing it around that, and just getting practical, is what I found to be the best antidote to NIMBYism.

Laine Perfas: It is interesting to think about how the housing market affects so many things that we don’t always realize are connected. Are there other examples of the ways that the housing crisis is affecting the day-to-day life of local communities and their economies?

Glaeser: Let’s go through the different ways we think that the slowdown in building has changed America. If you look at people who are 35 or 40 in 1983, a lot of them had housing equity. Thirty years later, they don’t. Whereas if you look at people who are 65 to 75, in 1983, not a lot of them had $2 million worth of housing equity. Now, a bunch more of them do, right? You’ve seen a transfer in wealth from the poor to the rich. Two: America is less productive as a country because we don’t build in our most productive places. And so because we don’t allow large amounts of building in Silicon Valley, because we don’t allow large amounts of building outside of New York, and now we don’t even allow it in areas of Miami or Phoenix or Seattle, we are less productive as a country. Third: We are actually worse at carbon emissions than we otherwise would be. If you think about where in America would be the greenest places to locate housing, just greenest intrinsically, it’s coastal California — not because of any environmental regulations, but because of a Mediterranean climate, that means you have to do much less heating in the winter and much less cooling in the summer. If you rank, metropolitan areas by their carbon footprint, adjusting for income and average family size, the cleanest ones are all in coastal California and they’re the most heavily regulated parts of the country. And so these rules are actually making America and the world a dirtier place. We have much less upward mobility, right? The places that are most heavily regulated are also the places where Raj Chetty and his co-authors have identified the most ability to turn poor children into middle-income adults. And so we’ve created a country that is fundamentally more fixed and fundamentally more unjust because of this. We’ve created a country with more housing price volatility. What you see in places where housing supply is relatively elastic is, as housing goes through the cycle, prices stay relatively flat, and it’s the supply of new homes that takes up the slack. By contrast, in places that are more restricted in terms of building, that’s where you see the largest price swings. And it’s precisely that which got us to places like the global financial crisis 20 years ago. When you turn off this crucial market and you stop its ability to flexibly respond, you just end up with an America that’s much less productive, much less fair, much less open, much less green, and much less safe against all sorts of fluctuations.

Laine Perfas: Given the tensions that we’re seeing between the inequity in homeownership and just the unaffordability across the board, it seems that that would be a perfect place for innovation to happen, for creative minds to come together and think of creative solutions. What is preventing that from happening?

Furman: I actually think that is happening. We’ve talked a lot about interests. Some people have an interest in prices going up. Some people have an interest in prices going down. Some have an interest in stopping building. Some don’t. Ideas also matter. The research that Ed has done for decades has persuaded a lot of people. When I was in the White House, it persuaded me and it changed some of the policies that President Obama did. But on this issue, it’s also become a cultural movement. There’s NIMBYs, but there’s also YIMBYs: Yes in My Backyard. Some of them have read all sorts of papers. Some of them maybe just read the book “Abundance” by Ezra Klein and Derek Thompson that popularized a lot of these ideas, but it’s become almost a cultural attitude. The solutions themselves are not that difficult. It’s make it easier to build, make it easier to get a permit, have fewer restrictions on how high you can build, have fewer restrictions on parking. None of that is complicated. But understanding just how beneficial that is for not just the immediate issue at hand, which is affordability, but as Ed was talking about before, for economic growth, for opportunity for mobility in a way that gets people excited and motivated. There’s a lot of interest here. I’ve spent a lot of time over the last decade in despair about how slow the progress has been. Recently progress has speeded up quite a lot and ideas and research and its translation really deserves a lot of the credit for that happening.

“In the U.S. every little community has its own rules. And everything is bespoke. If building is going to be bespoke, it’s not going to be highly productive.”

Tomasso: I would totally agree with what Jason just said, that actually there are brilliant solutions and really creative minds working on this. At Ivory Innovations, we’re a nonprofit dedicated to finding and then deploying the best solutions, the most innovative solutions, to housing affordability across the country. It’s a privilege every day to get to see some of these innovations in places like South Bend, Indiana, who created a pre-approved plan set to make it much easier to build missing middle infill housing. That means getting a townhome or a duplex approved and permitted in as little as a day. Or we’re seeing lower offsite construction methods coming online. Also there’s a role for AI and technology, especially in the permitting and feasibility side of things; we’re seeing the coolest and brightest minds and I love talking to them. The challenge is deploying these more widely, especially these context-sensitive solutions. But I will say that I’m actually filled with so much optimism.

Laine Perfas: Jason, we touched on this earlier, but are there other issues that more construction might help solve as well?

Furman: In the United States right now, we have a problem where the percentage of men between the age of 25 and 54 who are working has been declining for 60 years. There are a lot of people who think we can solve this with manufacturing jobs, but the problem is technology means we have fewer and fewer manufacturing jobs each year. Moreover, if you look at it, construction jobs pay more than manufacturing. This has an important angle, not just for people buying homes, but for people looking for jobs, looking for work. These are high-paid good jobs. And just to be clear, I wouldn’t do a make work program where people go out and build houses we don’t need, just to have jobs, but it’s like a double dividend. We actually really do desperately need these houses. We’re getting in the way of building them, and if we stopped getting in the way of building them, we’d also have more jobs for a population that has a harder and harder time figuring out where it will find work with the economic changes and dislocations that we’ve experienced.

Glaeser: On one level it’s incredibly exciting to be at this moment, which people do care about this issue. I want to add just a slight note of caution though, which is let’s face it, we haven’t solved the problem. And the prices are going up, not down. The policy interest and the nonprofit interest is great, but we’re still fighting against the fact that it’s actually getting harder to build in many parts of America. We’re fighting against the fact that technological productivity in this industry has gone backwards for the last 50 years. What local regulation does is it doesn’t just make it harder to build, it makes it harder to build big projects, and so you kill off scale economies from that. It’s very hard when the firms that are making houses have seven people, and they’re making one house at a time. It’s very hard to get them to invest in the kind of research and development technology that happens in normal firms to make things going forward. I’m struck at the difference between America and Japan. Japan also has local zoning, but they have nine nationwide zones. Nine. Any place that has that zone has the same rules. And so they have a thriving prefabricated housing industry precisely because you know that if your house works in Zone A, it’s going to work in Zone A everywhere in Japan. And so that’s a sort of better model in terms of taking advantage of scale economies. Yet, as we know, in the U.S. every little community has its own rules, its own thing. And everything is bespoke. If building is going to be bespoke, it’s not going to be highly productive and it’s not going to see its productivity grow.

Furman: The other caution I inject is recently the good ideas to deal with this problem have grown in attention and interest. The bad ideas to deal with the problem have also grown in attention and interest. Probably the single worst idea is rent control. The Swedish economist Assar Lindbeck once said, in many cases, rent control appears to be the most efficient technique presently known to destroy a city except for bombing. And the logic of that is very clear. When you lower the price of rent, you end up with less building. It’s the exact opposite of increasing supply. It’s decreasing supply. You often end up with a random set of people in terms of who gets lucky and gets that lower rent and who doesn’t. So rent control — temporary is bad, permanent is even worse. That idea has also grown at the same time that the supply ideas that we’re also excited about have grown.

Glaeser: Let me also echo the earlier comment about having a set of insiders who live in inappropriate housing. We find this very much in rent control as well. We see people who are staying in their units, three-bedroom apartments on the upper west side of Manhattan, long after their kids or their spouse is alive; they’re staying in the unit because they can’t sell it. It’s a rent-controlled unit. And so they’re stuck there in place. So this misallocation of person-to-unit is also a big deal with rent control.

Tomasso: I’m curious, Ed, across your career, as you’ve seen, maybe we could say like kick the can down the road a bit, is there something that does give you hope, especially recently, maybe since the pandemic as the housing crisis has intensified?

Glaeser: I think you’re giving me a lot of hope right now, Amy. I’m fundamentally optimistic and as long as we both remember what’s happened over the last 70 years, and we also remember Jason’s warning that there also are bad ideas, I’m with you. We have a chance to do something good, and let’s be hopeful about that.

Laine Perfas: One thing I wanted to spend a little time talking about is most of the conversation has focused on the densely populated areas in which there’s high demand. I’m wondering if there’s a reason why we haven’t made more efforts to incentivize moving out of those high-demand areas. Are there efforts in place to try to make the densely populated areas a little less densely populated?

Glaeser: Yeah, I think the federal government should be neutral about space on these issues. I think it’s a glory of America that we have lots of different density levels, and there’s no sense in which I think that everyone should live in one particular type of area. But there’s a lot to like about dense living. It tends to be relatively low carbon. It tends to have lots of upsides in terms of productivity. Typically as the density in the metropolitan area doubles, per capita incomes go up by about 6 percent. I think having a national policy which pushes away from density feels like a mistake to me, especially since we already have policies to pay for highways. That basically is a large-scale subsidy for people to use our highways, which is also a subsidy for low-density living. Plus, whatever tax benefits we give toward homeownership, that tends to load away from cities and away from dense living.

Laine Perfas: Just to make sure I’m understanding you, you think being in densely populated areas is good.

Glaeser: As someone who wrote a book titled: “The Triumph of the City: How Our Greatest Invention Makes Us…” happier and all sorts of other things …

Laine Perfas: Well, that’s neither here nor there, Ed.

Glaeser: I’m certainly associated with that view. I certainly don’t believe that the federal government should be artificially inducing people to move to cities, but I don’t think the federal government should be artificially inducing people to move away from cities, certainly not more than they already are. And the subsidy of transportation infrastructure that enables lower-density living is already a sort of significant subsidy to lower-density living.

Tomasso: I would add also some of the states that have had the most progressive land-use reforms are actually quite rural. Maine and Montana come to mind. Montana passed sweeping statewide land-use reform called the Montana Miracle because it was so surprising, thanks in part to the governor’s bipartisan taskforce. In Montana there’s 14, basically, menu of options for cities to reform their land use, everything from increasing ADU’s to decreasing lot size. However, it applies to cities greater than 70,000 people. And there are a few other restrictions. It shows that again, there’s this calibration. Same thing in Maine, single-family zoning essentially ended statewide. But while there’s great promise for maybe adding an ADU, accessory dwelling unit, on a 10-acre lot in rural Maine and creating an opportunity for some intergenerational living, the reality is that the infrastructure needs are still quite great in these rural places where maybe there’s not town water, town sewer, maybe there’s not a town. It just doesn’t always create, again, the more affordable, attainable housing. However, in the cases of Maine and Montana, there’s a lot of opportunity for local alignment and local context around how these land-use changes are shaped. And I think there’s a lot of promise there.

Laine Perfas: Earlier in the conversation we talked a little bit about interest rates. I wanted to talk more about how they affect people’s decisions, whether or not to pursue buying a home and not just the interest rate of the moment, but the fact that it could change suddenly.

Furman: I remember a lot of friends of mine in 2022 and 2023, younger friends who needed to buy houses, were saying, “Hey, the mortgage rate is really high. I’m just going to wait a year or two for the mortgage rate to come down, and then I’m going to buy the house.” And I actually told them, “You know what? There are a lot of reasons interest rates are higher. I’m not so sure that if you wait a year or two, you’re going to get any better deal. You might even get a worse deal.” I’ve given all sorts of people advice that ex post didn’t work out. That was, I think, pretty good. So interest rates are high now. For a while we thought it was just because they were trying to fight inflation with the Federal Reserve. Inflation has come down some; it’s not all the way down. But even with the Federal Reserve cutting its interest rates, the interest rates that homeowners actually borrow at haven’t come down very much. Now, as you’re making a choice, the interest rate might discourage you from buying. But then it leads more people into renting and drives up the cost of renting too. So for any individual, you want to take that interest rate into account in making choices, but it’s not like the problem is solved by us collectively shifting over to renting because the market as a whole ends up suffering for it too.

Glaeser: Just since you’re looking for individual advice, a couple of things on timing your housing market purchase. There’s a lot of volatility in housing prices. And so if you know you’re going to buy, you’re going to buy sometime in the next three years, you probably don’t want to delay because you think you’re going to time something on interest rates that’s going to be smart because you’re adding in lots of extra risks to what the price is going to be by delaying. And that’s probably a bad thing if you know you’re going to buy or not. Whereas delaying because you think you’re going to market time is unlikely to be wise, delaying because you want to be picky about getting a lower price? That’s actually probably smart. Whether or not you are selling your home or buying your home, you don’t want to let your real estate agent push you into moving today as opposed to giving it another six weeks to find a better price product. And so those are all sort of things which are the received wisdom of the real estate economics community around timing your purchase.

Laine Perfas: While we’re on the topic of advice, is there any other advice that people should be thinking about if they are thinking about taking the plunge into homeownership or maybe already own a home, but are looking to sell and buy a different home?

Tomasso: We’re seeing a lot of new models that are changing the landscape of homeownership. Co-buying is increasingly popular. There are platforms that are helping with joint homeownership. Fractional paths to homeownership. And also community land trust is a different model where the land is owned by the land trust, so greatly decreases the overall cost of the home. These are just a few of many — but they’re providing paths to homeownership that are more attainable. They might take longer. They might look a little different, but they’re getting to the same end result. And then the other thing I love is the potential for missing middle infill housing, especially for owning part of a home, owning a unit in a triplex or a duplex, renting out the others and that as a path to equity-building over time.

Glaeser: I will give one piece of advice that I think I’ve had for 20 years, which is, yes, owning a home is an investment unquestionably, but you fundamentally shouldn’t count on getting outsized returns from that investment. And that investment can go up as well as down. And you should be buying a home because you want it as the stage on which you will play out your life. And you should be buying it because it is a fit for what you are and the way that you want to live your existence. You should not think as investors did in 2005 and 2006, that “Oh boy, I’m going to get rich by buying houses.” So just be smart about it. Be smart about thinking about the level of house that you can afford. Think about all of the costs that are going to go on. People typically underestimate lots of different pain points about neighborhoods and I think often they overestimate the niceness of a shiny new structure relative to the fact that this place adds an extra eight minutes every time you want to go to the supermarket. Just think about all the pain points that might not be obvious. And remember, you are in a market where you’re dealing with people, particularly your agent who’s trying to make a sale. And that doesn’t make them bad people, that makes them normal people. But you want to be aware that there’s a person who’s trying to get you to make a sale. So be smart about that psychologically.

Laine Perfas: So this is my last question and I’d love for each of you to answer it: When you dream about a future that has cracked this housing nut, what do you see?

Furman: Personally, just a greater degree of freedom for people to be able to live out their dreams and live their lives. And that freedom, for the most part, involves government to stop restricting the freedom to build larger things, build where people want, and build where people want to live. And so there’s all sorts of places where I’m in favor of more government regulation. In fact, in general, there have been probably more debates where I’ve been on the pro-regulatory side than anti-regulatory side. but this is a place where regulations are really not about protecting the average American. They are about protecting a small group at the expense of others. And so less regulation, more freedom is, for me, the ultimate goal in terms of housing and letting people live out and fulfill their dreams.

Tomasso: I’m an urban planner at heart, so while, yes, we need 2 to 4 million homes by different estimates, I also think a lot about where those homes are located, how they’re accessed from a transit perspective, and who is welcome there. And so my vision for, let’s say, 20 years for housing is really more comprehensive of walkable, livable neighborhoods that are amenity-rich, that are built with climate resiliency and durability in mind, and also that are mixed-income and community-oriented. And while, yes, of course there’s a policy side of things — there’s the more flexibility, streamlining, and the rules around how housing gets built — if I could wave a magic wand, I would change land-use from majority-zoned for single-family-only homes in the country to majority-zoned for multifamily duplexes, townhouses, even cottage clusters. My ultimate vision is really around community and housing as a really important element, but not the only element of community.

Glaeser: I guess I dream of a case in which a young family like yours can come to any metropolitan area in America and find a reasonable place to live that you’re excited by, where you can send your kids to reasonable schools and you’re not spending 50 percent of your income on dealing with your housing. I guess that’s what we’re dreaming about. I want to highlight something that’s fundamentally different between the planner or the architect’s perspective and the economist, which is, fundamentally, we believe in the virtues of choices. I think it is a glory of America that we have different types of communities, and I think there needs to be more, right? I want to see more experimentation, I want to see more different types. I just think we should be open to lots of different types of building and open to the genius that so often exists in American spaces that will find ways for families of the future to find the life that they dream of.

Laine Perfas: Thank you all for this conversation.

Tomasso: Thank you.

Glaeser: Thanks.

Furman: Thanks.

Laine Perfas: Thanks for listening. For a transcript of this and our other episodes, visit harvard.edu/thinking. And if you like this podcast, rate and review us on Apple and Spotify. Every review helps others find us too. This episode was hosted and produced by me, Samantha Laine Perfas. It was edited by Ryan Mulcahy, Paul Makishima, and Sarah Lamodi. Original music and sound design by Noel Flatt. Produced by Harvard University, copyright 2026.

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