Housing affordability has become a policy issue in the United States with skyrocketing prices, restrictive regulations, and debates over the use of federal lands. Advances in artificial intelligence are changing how researchers approach data and public policy.
Arthur Gailes, a research fellow at the American Enterprise Institute, focuses on housing markets, finance, and mortgages. Before joining AEI as a research fellow, he worked as an economist and data scientist at the Othering and Belonging Institute, coordinated the California Fair Housing Task Force, and served as an international economist at the U.S. International Trade Commission. He holds a master’s degree in applied economics from Johns Hopkins University and a bachelor’s in English from George Mason University. His work now centers on increasing housing supply, “light touch” density, and the use of federal land for housing development.
“We’ve gone in pretty much two years from nobody in our relatively small office using AI at all to it being pretty much integrated in every part of our analysis,” Gailes says about the role of artificial intelligence in his research. “Most of what I end up saying is negative, because you try to fill in the gaps. We struggle with the bias that AI models have, particularly against institutions and ideas that it labels as right of center.” He says it’s important to check his work at every step to prevent “downstream biases” from shaping policy conclusions.
Gailes’ interest in housing policy came from hands-on exposure. “In the interim between my bachelor’s and master’s degree, I started working at a homeowners association and became overly familiar with a lot of really local level housing policy issues through that, and decided I wanted to go back and study it,” he sahs. California’s exploding home prices and the struggles of working-class families to access homeownership cemented his focus.
Gailes says risk aversion is why people oppose development. “I struggle to convince my own mother that she should allow duplexes in her neighborhood,” he says. Homeowners fear losing their largest investment. “If there’s a 5% chance that my entire life investment in my house is going to go down the toilet, I’m not taking that 5% chance no matter what that equals up to on average.” He calls this the essence of the NIMBY mindset—acknowledging the need for more housing but resisting it next door.
He also highlights anti-growth and anti-market attitudes. “There’s a lot of people who are kind of on the far left and might be called NIMBYs because they only want property development insofar as it’s guaranteed by the government to be available either at low prices or price controlled.” In practice, he says, “government restriction on the price of housing also restricts supply.”
Other cities offer lessons, according to Gailes. Philadelphia used property tax abatements to encourage redevelopment, and “we don’t see any significant decrease in the percentage of minority groups in those areas that got redeveloped,” he says. Instead, homeownership rates among lower-income families increased, giving residents stability and a stake in improvement.
California, however, shows how conflicting goals stall progress. “You say you can’t build unless it’s affordable. And by affordable they really mean subsidized,” Gailes says. “You can’t build unless it’s subsidized, and then you don’t build enough subsidized units.” Combined with local opposition, these rules created “a blast radius for nuclear explosion in housing prices that radiated out to the rest of the country.”
Gailes’ research also explores the use of federal land for housing, particularly in the West where the federal government owns nearly half of all land. “There’s a lot of land that is really doing absolutely nothing,” he says. AEI’s analysis found that with just 0.1% of that land, “you could build a million homes in that area over the next ten years, and if you fully leaned into the Freedom City idea, 3 million homes over the next 40.”
Gailes estimates selling select parcels could raise “at least $100 billion and up to as much as a trillion over the next ten years.” Local communities would gain new tax bases as well. “Each new home that gets built … that’s $4,000 for each year for each home,” he says. “This is a tremendous revenue generator, as most housing construction is, for the cities involved.”
The problem, he says, is bureaucratic inertia. “The Bureau of Land Management itself has no particular incentive to get rid of this. It’s about the lowest of their possible policy concerns.” Change will require executive action. “The president, I think, can more or less do this with the stroke of a pen,” he says. “It could happen if it becomes a policy priority.”
