Americans have been told that buying a home is one of the safest ways to secure their future. But when retirement depends on home values continuing to climb, affordability begins to look like a threat. Carlee Alm-LaBar is joined by Daniel Herriges, co-author of Escaping the Housing Trap, and Alli Thurmond-Quinlan, executive director of the Incremental Development Alliance. Together, they push beyond the idea that housing is simply an investment problem. Limited supply, narrow housing choices, transportation, retirement, and municipal finance are all tied into the same system, leaving people with fewer ways to find security at every stage of life.
For many Americans, a home isn’t just a place to live anymore. It’s the savings account, the family inheritance and, in many cases, the retirement plan. That creates a tension at the center of the housing debate: The higher prices that help one household feel secure can also make it harder for another to get in.
In a July 14 New York Times opinion piece called “The Housing Crisis Is Also a Retirement Crisis,” Kyla Scanlon looks at how homeownership became one of the main ways Americans try to build a stable future. Part of the story is that the retirement floor has weakened as more risk has shifted onto individual workers. The house became one of the few major assets many households believed they could count on.
Scanlon writes, “The house can’t do two contradictory jobs at once. It can’t keep getting more expensive for the owner’s retirement while also becoming easier for the next buyer to afford.” Sound familiar? Building more homes can help with shelter, but it doesn’t automatically address the role housing plays as a financial asset. If homeowners still need prices to rise so they can retire, then every conversation about affordability is also a conversation about whose security is being protected and whose is being delayed.
So the question for today is: How can we make housing affordable when we’ve also made homeownership one of the main ways people are supposed to feel secure?
With that, welcome to Upzoned, where we take one big story making the news and explore what it can teach us about building stronger towns. My name is Carlee Alm-LaBar, chief of staff here at Strong Towns, and with me today are Alli Thurmond-Quinlan and Daniel Herriges. Welcome.
Hi, Carlee.
Good to be here.
I’d like to give a quick bio so our listeners know you both. Many of them already do, but for those who don’t, Alli is an architect, landscape architect and small-scale infill developer. She’s executive director of the Incremental Development Alliance and the founder and principal of Range, a multidisciplinary design practice based in Fayetteville, Arkansas, where we all recently spent some time. Welcome, Alli.
Thanks. So excited to be here.
Daniel is a longtime Strong Towns contributor and founding member of the Strong Towns movement. He’s the co-author, with Chuck Marohn, of “Escaping the Housing Trap: The Strong Towns Response to the Housing Crisis,” and he now works as policy director at the Parking Reform Network. Welcome, Daniel. Thanks for joining us.
Thanks, Carlee.
And of course, Daniel, I wanted to start with you because when I read this article, it felt the core framing very much echoed the housing trap. So, can you tell me what you thought when tell us what you thought when you read the article?
I might actually be a little bit contrarian here because the first thing I thought was, "Oh, this sounds Escaping the Housing Trap. Yeah, I was nodding along with we're asking a house to do two fundamentally incompatible things, which is perpetually rise in value and remain affordable for new buyers, I think what would be interesting though is to pull apart some of the threads of the article, which are or aren't separable from each other, or figure out how separable they really are, because I think that gets at the question of well, what can we do about this?
Because the author's thesis is this the housing crisis and the ability of people to feel secure in their retirement that these are inextricable, I think that there's some truth to that. But so when we say that a house is people's nest egg, though, I think there's a sense in which that's not strictly as a financial asset. One of the things, one of the biggest expenses for seniors in retirement is housing, and actually, when I think of the people I know who own houses, I think overwhelmingly the idea isn't the house I live in is an investment product in the sense that,, I'm going to buy a bunch of stock.
It's not necessarily a financial asset., I'm going to cash it out and be rich. I mean, if you're in, if you bought in California in the right time, there are places where housing has gone, way beyond expectations. But I don't actually think that the majority of homeowners think about it that way. I think they think I am buying stability and security, including security and housing, and I think that the way in which housing is a retirement nest egg for people is that typically, once you own a home and you've paid off that home, then the way you're going to afford your next home is with the equity in the home you already have, and in some cases, seniors might downsize, get some of.
Back in cash, or they might, eventually, the proceeds from a home sale might support an assisted living situation or something that. But very often, you see a lot of people who age in place, a lot of people who don't really meaningfully downsize until very late in life. The equity they have in their home is supporting housing, which is maybe their biggest expense, and part of the reason that people have insecurity about that is because housing is so expensive, including anywhere that an older person might go and rent if they sold their home.
So I think if we can unpack that, I did I ran some numbers, and I won't try to talk forever. But I have a close relative who I was curious because I knew the numbers, so I ran the numbers. Because they bought a home in 1990 for 110,000 dollars, and they sold that home in 2023, so just barely beyond the 30-year term of the mortgage. They sold it for 370 $1,000 assuming a 20% down payment. So they would have made a 22,000 down payment on that home in 1990. If they had taken that down payment and put it in index funds, and then paid rent roughly equivalent to the monthly payments they were making on that mortgage for 30 years, that same 22,000 that down payment would have been worth 420,000 or slightly more than what they sold the house for, so it's not housing is uniquely some massively lucrative financial instrument versus investing money in other means.
It's that it buys you security because one way or another you have to pay for somewhere to live. You might as well pay a mortgage if you can and build equity rather than pay rent to someone. But I think that's the sense in which people are thinking about it as a nest egg. Is I need to live somewhere. I want the security of knowing that I will always have somewhere to live, and that can't be ripped from me, even when I am older and am not working for an income anymore.
So I just wanted to throw that out there as because there are some differences when you get into talking about 401k and pensions, or the authors. This idea of almost a wealth fund based on AI wealth. What can we do to replace this retirement savings? Where,, yeah, those are all interesting ideas, but I didn't find that the article cohered really tightly because I think we can actually separate what is the investment value of the house from what is the housing security that.
Yes, that's really interesting, and we're going to come back to a couple of those content concepts because I thought that the I was a bit with you that I thought the underlying principles of the article spoke to something just bigger than what housing has created, but maybe housing was the entry point for the conversation, right? Alli, what were your first reactions when you read
It? I had a lot of the same the first math that I did was similar to Daniel's, although I think I came to a little bit different conclusion. I think there's a big chunk of this house as a nest egg that is a symptom to me of our housing market. It's not the starting condition. I don't actually think we started out trying to intentionally build a housing system where your house was your nest egg. I think it's actually that condition is downstream of housing scarcity itself. That if your mortgage is eating up 30% of your income during your peak earning years, you don't have any money left over to invest in a real retirement portfolio elsewhere.
Right in lots of other places in the world, your housing is a much smaller overall percentage of your income during peak earning years, and so you are not only investing that down payment and then all of your mortgage payments through the years, you might be renting, right? You might be owning, but if you have a housing market that is less expensive because you're able to build enough housing, and so we aren't all bidding ourselves up against each other, and you've got a country that has better security for old age. Then you don't end up in this really specific.
All of your money is going to your house because that's your largest expense every month, and then you can't afford anything later. You've got to fix that scarcity, and which starts to then correct prices pretty quickly, and then you don't need your house to double as a pension, right? You can just save the difference, and I do think we're seeing downsizing significantly less in this generation than we would have 40 years ago, for instance. We hear and that I think is again a scarcity problem. Downsizing has to be a lifestyle upgrade, in my opinion.
You typically want to be able to be convinced to leave a house that you, a neighborhood that you, and you want to either be able to buy something else, rent something else that is in your same neighborhood, near your near the coffee shop you love, near your friends. You don't have to get any bridge club. Which means we need more housing diversity. You have to have something nice to downsize into that is relatively close to your neighborhood, or you have to be able to downsize into something that is a lifestyle upgrade.
But the combination that we've seen of massive exponential increases in property values with high interest rates means that when boomers are looking to downsize. They get a worse home for the same amount of money, and so the rational economic decision is to stay in a house that's too big for them, even if it doesn't fit their needs anymore. Because nobody's going to trade down a worse life just to free up some housing stock for everybody else, right? So if we want empty nesters to actually move, we've got to legalize that housing that they would want to move into that does improve their life as they start to be able to drive less, as they start to have different social needs.
Yep. No, I couldn't couldn't agree more. I think it brings about some different conversations, Daniel. I was curious when you think about the work that you in Chuck did together with Escaping the Housing Trap, and does an article or a framing this can it even if we see some fundamental maybe places where we don't agree, can it help advance the conversation that we, I think, all three of us care about, right?, if people start to see this as a trade off, and as a as a retirement crisis, not just this, housing trap in a more generic sense,, can that help advance the discussion?
Do you think?
Yeah, I think it certainly can, and I think I mean this does a good job of getting at just some of the basic fundamentals of how are people thinking about housing over the course of their life? How are they thinking about security in their life? I think it's a relatable piece and a good conversation starter. I just, I find my restless mind wanting to go a little bit beyond it because I, and I think Alli hit the nail on the head. I think where I want to take the conversation, not necessarily our conversation here, but the collective conversation about housing, is a lot of this circular aspect of it, where it's the reason you feel financially insecure, the reason you feel your retirement is maybe not secure.
How much of that is about the fact that you've been on this housing treadmill your whole life because housing is so expensive, and how much of it in retirement is because options that would be more appropriate for you at that stage in life don't exist? I mean, Alli's the source of one of my favorite housing factoids that I cite all the time about just the insane mismatch between the households that exist in this country and the housing stock that exists in this country, and what we're building. You can correct me on the numbers, but it was roughly two thirds of households are one or two people, and we're building mostly three and four bedroom houses, and it's what, what?
But and there are a lot of reasons for that, and our book gets into a lot of them. But this whole notion that the starter home or the reasonable downsize into home-that those ends of the housing options for those two ends of the lifespan-just we're not creating them, they don't exist, and so a lot of the dysfunction is downstream of what we're building and what we're not building, and why, and it's downstream of that scarcity.
Right, right.
And I think that's something that there's a there's a new piece out that is called the Great Housing Reversal, that is an analysis of a couple of different good sets of economic data that is also really talking about how the boomer generation that currently own most of those homes, single family suburban homes on large lots, three to five bedrooms, the thing that we've really legalized everywhere, that most of those homes were built for them, right? The suburban homes that we were building in the 1950s for their for the boomers' parents were the typical Levittown house right was two bedrooms 750 square feet suburban homes were dramatically smaller they were more mixed use that we have this very specific generational pattern that we built the zoning systems the transportation systems, and the municipal systems around that form of housing, because that's what they wanted, and so now they own the predominant number of those homes.
We are still inheriting the system that is primarily legalizing those homes. That is not what we're seeing Gen Z, millennial, Gen X buyers really, preference when they are given a preference. All of the those other three younger generations that we're seeing are being housed where they can afford to be housed. Right, we've got a significantly lower generational wealth number in all of those generations. We've got a lower relative income relative to housing costs for all of. All three of those groups than most of the boomers did when they bought those houses, and so we also I think there's a I even think the article has a missing nuance that this is a really specific generational housing problem because they built a really novel form of housing for themselves and built all these other systems around it, and it is going to have I think a really mixed reception, even when those houses start to sell.
Right now, values are very high because we built systems where nothing else could be built. I think as we start to see other things be legalized, we're going to see a wider set of housing types that are seen as desirable, if not more desirable, and I think there's that one paragraph in the piece that's tucked in there. That's actually the most important part to me is that, and we've seen this in a couple of cities, but right, it's mentioned that Berkeley tripled its permitting and then watched its rents fall back to 2018 levels.
Right, that's not that's not a theoretical. If you build more housing, costs will lower. We're seeing that in major markets, Minneapolis, Austin, my market in Northwest Arkansas is seeing some of the same thing. We see a price correction as soon as we start to see other things be available to the market, and so I think I would to see that explored more. Is how do we shift from this system that was really built around one generation's preferences into a more diverse housing set in a way that recognizes that generation did also put all of their eggs in that housing basket,
Right? I think that is the one of the takeaways. I think for me with the article was understanding that it is this, as Daniel said, I think in the first thing he said was this larger question of security,. I think that this article does a really good job of sharing that sense of security that was maybe achieved through other ways, and now this is one of the one of the lingering ways, I guess that is that is maybe being held onto even more tightly. But I think both of you are so skilled at helping really tease out what are the issues at play here, and that it isn't simply just the trap as we describe it.
What was your I guess maybe big picture takeaway from this article, Daniel, as far as advancing the conversation that you've been so entwined in for the last few years, what do you, what do you think? What was the insight that you took away aside from wanting to do the math a little bit more, right, and challenge some of these assumptions? What does it advance as far as your thinking goes?
I think talking about retirement in a very real way that connects to just the truth of people's lives, is an opening to having more productive conversations about how we can shift the system. I mean, I think even looking at the work that the AARP has done on this issue, just in terms of messaging and in terms of the political conversation, I mean, they've been huge allies of Strong Towns over the year. They've worked with the Parking Reform Network, where I am now., they've been great, and that doesn't mean that their average member, I that the awareness is there.
I the there's not some secret teeming majority maybe of retired Americans right now who just want a little walkable townhouse in a in a cute urban area, and they know that's what they want. I just wish the market were supplying this to me., I wish I had a backyard ADU that I could. I think I don't think public awareness of these alternative options is quite there if you're not in this bubble of people working on incremental development and working on relegalizing urban forms and housing options that used to exist in more abundance, but I think that it's a conversation you can have with people, and it's often really eye opening.
So, again, getting at meeting people where they are on the insecurity about how am I going to be able to live comfortably for the rest of my life and know that the rug isn't getting pulled from under me,. Meeting people with they are on that where they are on that, but then actually being able to say, "Hey, maybe there's a vision of what your life and your neighborhood and your home could be in retirement that you a little bit better than what you see in front of you, and maybe we could talk about what that would look, and what public policy would get us there.
So I think there are some natural allies there, and maybe that's my frustration. It's not just trying to quibble over the math, but it's I say frustration a lot. I didn't overwhelmingly dislike this article, but I just feel my initially my hackles got up at, oh, this is this intractable problem because we want housing to be affordable, but it's also people's nest egg, and they're going to cling to that, and they're never going to let go of that. Actually, I think there is a way that we can ease away from that by, I mean, yeah, you look at the numbers out of Berkeley, you look at we can build and we can legalize options.
They do emerge, and it's it's incremental, and progress can be halting. Sometimes the policy victories, initially seem a little bit fruitless because you haven't unlocked every deadbolt that you need to unlock to actually see a meaningful shift in what is getting built on the ground. This is something where it's going to be a trickle until it's a flood, and we don't know necessarily what's going to open those floodgates, what's going to be the last. But I think that we're seeing real change. We're seeing reason for optimism. We're seeing policymakers have different conversations about the built environment.
I, and fundamentally, I think that there is a way to ease away from some of these issues. The more intractable piece is of the housing trap, as we articulated in the book. To me, is not the retirement issue; it's the way that the mortgage market is intertwined with the financial foundation of the whole economy.
Right. Alli brought up the point too. The way that the suburban development pattern has now we have so much that is now built to a finished state with so many people that are dependent on that in one way or the other, and thinking about if you're if you're moving an elderly family member somewhere, it's it's often very difficult to keep them in, as Alli said, in that same bridge club, right? So I think that looking at this as an integrated issue, which I think Alli, you did such a great job of communicating-not just fixing the housing piece, but thinking about the transportation issues that have been created as well.
Alli, any thoughts on that, or Daniel's Daniel's, I guess, takeaway from the article that you want to add.
Yeah, I think a lot of my takeaways were, I think there is some of the language that gets used in these circles that is starting to trickle up. I think there's a lot of policies that are starting to get a broader understanding. I think we've not yet. The thing that this article showed me is we've not yet done a good job of explaining how complicated and intertwined all of this is because I think there's a lot of things that got brushed on that to me are a whole other whole should have been a whole other article right the 401k shift right that the shift from pensions to 401k was called a historical accident that wasn't an accident.
That was a policy decision that offloaded risk from employers onto individual workers, and so calling it an accident lets everybody off the hook. Which is the same thing with housing, right? We didn't stumble into this system where homes have to be retirement plans. We built this system on purpose after the war, and we could build a different system on purpose. But we've got to think about it as a whole system because even as we as we take this a lens out, we have the same municipal fiscal fragility that the article nails the household version of that problem, but then it misses the municipal version.
Right, cities are running exactly the same scheme as the homeowners in the piece. They need property values to keep climbing, just to service their infrastructure debt that they took on, assuming growth would never stop. So, that retirement trap that the author is describing at the kitchen table is also happening at City Hall. It is our growth Ponzi scheme, right? It is just a different on a different version of the balance sheet because it's a system, and so the same rules are happening at every level of complexity because that's the way the system works, and so we can't fix one little piece at a time.
We have to think about the way the system is working and then replace it. Right? We can't downsize our way into a worse lifestyle. We've got to build a better system that is accomplishing all of these different things in terms of economic stability and economic mobility, and a real way for people to, during their working years, in some way, be contributing meaningfully to a retirement plan that is going to be there when they retire. We've got to create that safety, but we've got to do it in a really comprehensive economic way because that's the system we're working against.
Changing one piece won't won't fix it.
So well said. I think that all of us are constantly working towards, increasing the understanding of the complexity around these issues that we care so much about. I do. I would agree with your conclusion that this, what this brought forward for me was oh there's so much more that doesn't get that doesn't get uncovered as this with this explanation, which I think is why I was gravitating towards what can it do for us in terms of driving the conversation because it does it is an opening that people care about, right?
They care about, and it resonates with them. Daniel, I would love for you, as one of the co-authors of the housing trap, to have the last word on this article and give some maybe give some people some hope on what you see the opportunities for us. There's a lot of momentum in the housing space, and a housing bill just passed. Where's the reason for hope?
The housing space really is the source of a whole lot of policy innovation right now, compared to a lot of other aspects of public policymaking, and it's not always cohering into an understanding of the system as a system, but I think that I mean it's an exciting thing to work on because there are people talking about really changing things. We're seeing things change on the ground. We're seeing it happen in ways that defy the complete gridlock of the political system in other areas, we're seeing bipartisan victories, nonpartisan victories. We're seeing, North Carolina just eliminated nearly all of its parking requirements, except in a handful of coastal areas.
They did it statewide. They did it by an overwhelming bipartisan vote, and in a way that wasn't even fixated on housing costs, it was it was an environmental campaign. But it was here's an issue that we can bring all these different coalition partners to the table, and we can talk about an issue that the first time you raise it with a legislator, they're going to be, "What? Why parking lot? Why? But there's an openness. I think everybody senses that the system is broken. Very few people can articulate, what is it about the system?
Talking about Ali, zoom out to that holistic the system. Very few people can articulate that, and most days I feel I can't, and I wrote half a book about it. But people are very open to trying things, and it's an exciting area of policy because of that, and it's happening at the local level and at higher levels, and with a lot of consensus that we need to shake some stuff up. So,, that's where my optimism comes from, and I think connecting people's basic sense of insecurity, I think that the overwhelming thing that people feel, left, right, rural, urban, you go around the country, people feel precarity.
They feel I don't feel the future is gonna give me a good life that I want. If you can meet people there, explaining some of this housing stuff is a way in which you can have a really interesting and really productive conversation with just about everyone, and maybe it won't fix the whole 401k pension. Some of these bigger forces. And nobody's going to come in and script the solution to all that from the top down. But this is something people want to talk about, and they want to change stuff. That's that's where I want to be working.
That's awesome. That's a that's a great last word. I think there's a there's a phrase about things seeming impossible until they're done, right? I feel we're in that moment with some of these housing policy changes. That's really exciting to be a part of. So thanks to both of you for all your work. Well, now we're gonna go to the down zone, and we're going to start with Alli. Alli, what is something that you have been reading, listening to, watching, experiencing that maybe isn't about what we've been talking about that you want to share with the group?
I have been really reading and thinking about that midlife change that Arthur C. Brooks talks about as the shift from fluid intelligence, right, where we're inventive and we're making lots of things into crystallized intelligence, and that is your later years of being able to, that fewer inventions and fewer patents and fewer new ideas come from people in that crystallized intelligence era, but that lots of the connections and teaching come from people in that, and that different careers have different times that happens. The half life of a career is what he's talking about, right?
So if you're a professional athlete, your fluid intelligence time has a really short half life. You're going to be retired by the time you're 40, probably. If you're a historian, that's the one that he references as being the longest. The half life is really long, and you're still doing some of your best work when you're 70. So I've been thinking about that a lot because he doesn't specifically talk about designers, but really starting to position a lot of the work that we're seeing coming out of our field in that lens has been interesting, and thinking about it not as a downside, but thinking about that as he talks about it as two curves, right?
That you have to jump from one strength to the other strength, and I think that it's a really interesting way to think about. There's lots of people towards that maturity in our fields generally. There's lots of crystallized intelligence, and then thinking about organizational structures and how we shift, and how we both really maximize people during that fluid intelligence time, and how we really shift as an as a field people in their crystallized intelligence. I've been thinking about that a lot. That's I just finished that book. It was recommended to me, and it's.
It's been something that shifted the way I thought about professional life and about a lot of the professionals around me and how we could all be doing better to be maximizing what we're best at the time of life and the phase of life that we're best at it.
That is awesome. Thank you for sharing that. That makes me adding to my reading list for sure. That's great. That's great, Daniel. I'd love to hear what have you been reading. What have you been thinking about? What do you want to share with our with our listeners?
I have struggled to find time, with young kids in the house for reading long form books, and that's something I hope to move back into in my life. I have been following a bunch of really interesting Substack newsletters, things that, and they show up in my inbox, and I can find 20 minutes more easily than I can sit down for two hours. One that I love, and so this isn't a particular installment of it that I'm thinking of, but so Construction Physics is a newsletter by Brian Potter that does these incredible, accessible deep dives into how things work related to technology, related to certain industries, how this is built or how that is built, and from a very holistic perspective, it's not necessarily the just the mechanics of a technology.
It can be something how does an oil refinery work was a recent one, and it goes into the whole process and some of the history of why there was one all about amplifiers and how amplifier technology has all these applications that,, I mean, in my mind, an amplifier is for music, right?, actually, talking about the history of that innovation, and then the different applications of it. So it's just every time I open up one of these, I'm going to learn something I had no idea about, and it's going to be a little window into a whole world of something I had no idea about, but he always brings this really interesting lens about why does technological change unfold in the ways it does, and why does productivity increase in this but not in that, and why does this cost what it does, and why does the market for this look the way it does?
So just highly recommend
It. I will definitely have to check that out. That's awesome. That's great. Well, I think by the time this episode airs, I think I would be remiss to say not talk about the fact that probably for the last month my free time has been watching the World Cup. If we're if we're being totally honest, so I too have not made time for reading I to, but it's for a different reason. I've been watching a whole lot of soccer, and so I'm sure over the weekend, hopefully, we're going to have exciting game.
But really enjoyed all. I am a soccer fan, I will admit, but I also just seeing the cultures come together, and this summer it was in the U. S. And that was really beautiful to see all of the different communities come together and experience our culture and take a little bit and leave a little bit here. So hopefully we'll have some great soccer this weekend, and it's been a it's been a it's been a fun part of the summer, so it's been really nice. So
Now, so here's the question: Where I could give you the opportunity to have a take or a prediction for this weekend that is not going
To be gosh, because I
Know that this will go live after the right,
Right? Or you could you could. All I can say is that I think that it is a very if you're a soccer fan, that for a long time it's been a debate of if Messi is the is the greatest of all time, and I think that this tournament has been really fun to watch, someone at the peak of their talents, and if you can just appreciate people at the peak of their talents, regardless of the of the sport or the academia or whatever, this is certainly an opportunity to do that.
So that's been one of my favorite parts. So no predictions, though. So by the time folks listen, there will be an answer. All right. Well, Daniel, Ali, thank you so much for joining us, and that's all for this episode of Upzoned. Thank you all for listening, and on behalf of all of us at Strong Towns, take care of yourselves and your places.
This episode was produced by Strong Towns, a nonprofit movement for building financially resilient communities. If what you heard today matters to you, deepen your connection by becoming a Strong Towns member at strongtowns.org/membership.