Scott Galloway argues housing is a supply problem, blaming homeowners who block construction to protect their property values and noting that duplexes and fourplexes fell from 7% of new completions in 1979 to 1.1% in 2025.
Galloway says Austin and Minneapolis improved affordability by removing height limits and parking requirements, while government incentives like the mortgage interest deduction add demand without fixing supply.
Galloway warns that most startups fail, with five to six of every seven new businesses gone within seven or eight years, and advises a 27-year-old to stay at a well-resourced corporation before starting one with his father.
Galloway Blames Homeowner Zoning Power for Housing Shortage
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Homeowners now control permits, choking US housing supply. Galloway says shifting permit power from local bureaucrats to homeowners, who gain from scarcity, hurt new entrants most. A 2020 Brookings study found zoning bars anything but single family detached houses on 75% of land in most US cities.
Renters increasingly cannot cover their full rent. Galloway says 20% of middle income renters could not afford their full rent at least once in 2025, up from 14% in 2024. For low income renters the share was 28%, up from 24% in 2019.
Small multifamily homes nearly vanished from US building. Duplexes and similar small multifamily buildings made up 7% of new US home completions in 1979 and only 1.1% in 2025. Galloway says housing is a supply problem, not a demand problem.
Austin and Minneapolis gained affordability by loosening rules. Galloway says both cities removed height limits and parking requirements for new units, and that this improved housing affordability. He holds them up as proof that easing supply limits works.
Housing subsidies add demand without fixing supply. Galloway says incentives such as low income housing tax credits and the mortgage interest deduction cost tens of billions of dollars. He argues they raise demand while leaving the supply shortage untouched.
Galloway disputes Shiller's view that housing underperforms. Robert Shiller finds housing trails most assets after taxes and maintenance. Galloway says the study omits psychic income and forced savings, and notes home sale gains are tax free up to $250,000, or $500,000 for married sellers.
Galloway gives a simple rent versus buy test. Galloway says to divide a year's rent by the purchase price and buy if the return clears a set level. He contrasts a mortgage with investing $2,100 a month in a Vanguard index fund.
Nike and Netflix shares each fell by half. Galloway says Nike's stock was cut in half in the last year and Netflix's was cut in half the year before. He uses both to argue that nobody can reliably time the top or bottom of a stock.
Most new startups fail within eight years. Galloway says five to six of every seven new businesses are gone within seven or eight years. He advises a young listener to stay at a well-resourced corporation and revisit a startup with his father later.
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