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Home Builders Association: regional housing constraints driven by costs, labor and lot supply
Summary
A Kansas City Home Builders Association official briefed the committee on regional housing market dynamics, highlighting high mortgage rates, tariffs and material costs, labor shortages in trades, and the need for smaller-lot and modular options to increase supply.
Will Reeder, executive vice president of the Kansas City Home Builders Association, told the Community Development Committee that persistent housing-cost pressures stem from a combination of higher borrowing costs, elevated construction-material prices and a long-term shortfall in housing production.
Reeder summarized national and regional indicators and told the committee that “shelter accounts for about 40% of CPI,” keeping borrowing costs high and contributing to elevated mortgage rates. He said the 30-year fixed-rate mortgage had been “relatively sticky in the mid sixes” and predicted a slow migration downward over 2025 into 2026. Reeder also told the committee that new-home sales now represent a higher share of housing transactions in the Kansas City metro — a shift linked to the makeup of the market.
Reeder pointed to three structural supply constraints: land, labor and lumber (used as shorthand for construction materials). He said permitting and development in this metro have not recovered to pre-2007 levels and that fewer builders operate in the market now than in the mid-2000s, contributing to slower housing production. He recommended a mix of smaller lots, cottage-style development, modular construction and policy changes to reduce fixed development costs and increase product diversity.
Committee members asked about affordability, institutional investors buying single-family units, and whether modular construction could help. Reeder said institutional investors account for a small share of the overall single-family stock nationally and that modular construction and structurally insulated panels (SIPs) can reduce time, labor and waste on-site.
Reeder and council members also discussed workforce: builders report persistent labor shortages in trades (notably framing crews) and an aging workforce with fewer mid-career workers entering trade jobs. He urged local strategies that empower small-scale developers and local nonprofit builders, and mentioned the city’s Portfolio Homes program as a promising local innovation the Home Builders Association supports.
The presentation was background information; the committee did not adopt any policy changes during the meeting.
