Why Don't We Build on Baltic Avenue?
The restart of the starter home market requires sweeping zoning reforms
For years, the housing debate has circled the same accusation: builders only construct “luxury” homes, presumably because that’s where the money is. It’s a comforting story designed to entertain and enrage, with simple villains and simple motives. It is also wrong. Builders default to Park Place because, in most American cities, building on Baltic Avenue (a metaphor for lower-cost housing) is either illegal, or mathematically impossible.
That point landed with unusual clarity when NPR’s Scott Neuman posted a short Instagram video (below) in December explaining why builders keep targeting the top of the market. His framing was deceptively simple, using Monopoly to underscore the point. That point was that the game is rigged.
Entry-level homes—the kind that let people start—have been zoned out of existence through regulatory suffocation. This includes minimum lot sizes, parking mandates, discretionary approvals, and neighborhood veto points, among others.
When the rules forbid modest homes, the market doesn’t “fail”; it complies by building homes upmarket, for it has no other choice.
THE CONSEQUENCES OF COLLAPSE
In my view, the market for starter homes in America has largely collapsed. The consequences are not abstract. Starter homes are the on-ramp to the American Dream. When they disappear, so do the conditions generally required for forming families, having children, and investing in place. Homeownership is still one of the strongest predictors of long-term civic engagement. Discourage it, and you thin the social fabric that cities depend on.
