The Federal Housing Administration's Ongoing, Systematic Obstruction of Density

"Since its 1934 inception, the FHA has insured mortgages for more than 34 million properties, facilitating mass homeownership over several generations," writes Scott Beyer. "But only 47,205 of these plans have been for multifamily projects. This is due to longtime provisions that make it harder for condos to get FHA certification. As late as 2012, 90 percent of a condo’s units had to be owner-occupied and only 25 percent of its space could be for businesses."

Beyer notes that some of the provisions were adjusted two years ago, "[but] these reforms still aren’t particularly friendly to condo construction. For example, the 35 percent cap on business space discourages development that often features ground-level retail beneath several residential stories. The owner-occupancy requirements also rule out many condos altogether, namely in expensive markets that rely heavily on tenancy and outside investment. Finally, a provision that forces condo owners to renew their certification every two years is a lengthy and expensive process not required for single-family homes."

All told, "only 10 percent of condo projects nationwide qualify" to receive FHA mortgage insurance.