With prices falling, the housing affordability crisis must now be behind us – right? Wrong. In A Better Way to Zone I describe the housing affordability crisis as a structural problem of the U.S. economy and that is still true. Business cycles come and go, and this recession will in time bottom out and the housing economy will rebound. The long term effects may be a slight lowering of average housing prices – but not much, and not over the long haul. The key problem remains – the U.S. economy is simply not creating jobs that pay (on average) what it costs to build new housing (on average) and that gap continues to widen.

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