For more than a decade, home building has not kept up with the demand for shelter, creating a housing supply deficit that has proven difficult to reduce significantly. In fact, the housing deficit in September 2016 was nearly 800,000 units – the widest gap between new household formation and housing completions in 18 years. While the monthly deficit has moderated substantially since then, home building has not increased sufficiently to close the gap left from more than a decade of under building. Why? Construction faces several supply-side headwinds: increasing material costs, a chronic lack of construction workers, a dearth of lots to be built on and restrictive regulatory requirements in many markets.