A blogger on Planetizen has a good overview of what many professional planners and economists believe would make a real dent in the U.S. housing problem.

We support reforms to allow developers to build more affordable housing types (e.g., multiplexes, townhouses, and mid-rise multifamily) with unbundled parking (parking rented separately from housing, so car-free households are no longer forced to pay for costly parking spaces they don’t need) in walkable urban neighborhoods, including large-scale upzoning, eliminating parking minimums, reducing development fees and approval requirements for moderate-priced infill, plus subsidizing housing for families with special needs.

Most planners also support innovative home ownership models, such as housing cooperatives and co-housing, modest inclusivity requirements (not so high that they reduce housing production), subsidies for households with special needs such as disabilities and very low incomes, and, sometimes, special regulations such as rent controls to limit rent increases.

Planetizen

This sounds about right to me. There are a couple reasons it is hard to do in today’s U.S. The most obvious is the massive political corruption driven by the construction/road/auto/oil-industrial complex. It is hard for politicians, especially local ones, to resist these forces. The second is the consumer preference for auto-dependent suburban development. I would not take this choice away from anyone. I would just stop subsidizing it and make it no longer the only viable choice for most Americans. Many people would like to try out a walkable urban neighborhood, but assume that there is not one available that they could afford. And they would largely be right. There are just not enough of them, and even in the ones we have the public infrastructure (protected bike lanes, frequent/clean/reliable public transportation, parks and trees) lags far behind what the leading cities in Europe and even parts of South America are providing. (Asia is hopeless though.)

The final issue is that you just can’t combine widespread car ownership and use with a walkable urban neighborhood. You have to get the number of cars down, then use all that space you saved for more housing, open space, and other amenities. And obviously, you have to make sure people can still get around.

So the answer is pretty clear – remove density limits (upzone in the parlance) and parking requirements (actually these last two sound a lot like a “free market” to me), then offset some of the disadvantages of urban density with excellent public infrastructure and parks. You may still need some subsidies and non-profit options to help the poor, but ideally that needs to be done at least at the metropolitan area scale if not state/federal scale. It’s a fairly simple formula but a long game and a politically difficult one.