> Public housing just isn't very big in the US
I have to disagree with the characterization here. I'm not sure we can just look at a number in a vacuum and say that the policy impact is small based on our intuition.
In 1979, there were 1,204,718 public housing units against a population of about 77,330,000 households in the U.S. That's 1 public housing unit per 64 families in the United States, and one per every 28 families that rent. By 1993, that number had dropped to 1 unit per 69 families and today that number is a little less than 1 for every 95, 1 for every 43 families that rent. That's a 31% decrease in the number of available public housing units on a per capita basis in about two generations. That's a pretty drastic cutback.
At the same time, the number of total private housing units being created was, with some ups and downs surprisingly flat from the late 50s through the mid 2000s, despite the fact that the number of households in the market more than doubled over that same period. And over the last 12 years, housing production has been way below previous benchmarks.
It seems to me a substantial reduction in public housing aimed at the most vulnerable households combined with a roughly flat (I would argue falling) production of new private units would have a pretty substantial bottom-up impact on the housing market.
>Restrictive zoning has banned us from building the sort of places we used to build.
I also want to point out that I agree with this sentiment broadly, but the two theories are not mutually exclusive. As a tremendous number of Americans have a tremendous amount of wealth tied up in their homes, they have an extremely strong political incentive to fight anything and everything in their community which would have an unpredictable impact on their housing values, including new dense construction.
Isn't there something to the idea that systematically commodifying housing and then reducing the supply of social housing causing prices to increase overall would have a double-barrelled impact on newly formed households across the income spectrum? These new planning restrictions didn't just come out of nowhere - there was a political constituency that wanted them.