To understand the US housing crisis, consider the lack of starter homes

As recently as the 1990s, when Jason Nageli started off, the homebuilding industry was still constructing what real estate ads would brightly call the “starter home.” In the Denver area, he sold newly built two-story houses with three bedrooms in 1,400 square feet or less.

The price: $99,000 to $125,000, or around $200,000 in today’s dollars.

That house would be in tremendous demand today. But few builders construct anything like it anymore. And you couldn’t buy those Denver-area homes built 25 years ago at an entrylevel price today, either. They go for $500,000.

The disappearance of such affordable homes is central to the American housing crisis. The nation has a deepening shortage of housing. But, more specifically, there isn’t enough of this housing: small, no-frills homes that would give a family new to the country or a young couple with student debt a foothold to build equity.

The affordable end of the market has been squeezed from every side. Land costs have risen steeply in booming parts of the country. Construction materials and government fees have become more expensive. And communities nationwide are far more prescriptive today than decades ago about what housing should look like and how big it must be. Some ban vinyl siding. Others require two-car garages. Nearly all make it difficult to build the kind of home that could sell for $200,000 today.

“It’s just become where you can’t get to that number anymore,” said Nageli, now the operations manager for Utah builder Holmes Homes.

Nationwide, the small detached house has all but vanished from new construction. Only about 8 percent of new single-family homes today are 1,400 square feet or less. In the 1940s, according to CoreLogic, nearly 70 percent of new houses were that small.

At the root is the math problem of putting — or keeping — a low-cost home on increasingly pricey land.

“When we started out 20 or so years ago, we could buy a lot for $10,000-$15,000, and we could build a home for under $100,000,” said Mary Lawler, the head of Avenue Community Development Corp. in Houston, a nonprofit developer. “It was a totally different world than we are in today.”

In Portland, Ore., a lot may cost $100,000. Permits add $40,000-$50,000. Removing a fir tree 36 inches in diameter costs an additional $16,000 in fees.

“You’ve basically regulated me out of anything remotely on the affordable side,” said Justin Wood, the owner of Fish Construction NW.

In Savannah, Ga., Jerry Konter began building three-bed, two-bath, 1,350-square-foot homes in 1977 for $36,500. But he moved upmarket as costs and design mandates pushed him there.

“It’s not that I don’t want to build entry-level homes,” said Konter, the chair of the National Association of Home Builders. “It’s that I can’t produce one that I can make a profit on and sell to that potential purchaser.”

That reality conflicts with demographics. The typical American household has fallen in size for decades, even as the typical home has grown larger. Downsizing baby boomers and young adults who delay children figure to drive demand for smaller homes. So will increasingly diverse young buyers who have more debt and less access to family wealth.

These shifts may force communities, builders, and buyers to rethink what a starter home looks like. In places where even small single-family houses are out of reach for many, the answer might be a condo.

Today in some parts of the country there is hardly anything on the market for under $300,000 resembling the American starter home of the past 70 years. In Raleigh, N.C., entering this weekend there were 17 such single-family homes with at least two bedrooms listed for sale. Across the Denver metro, there were six; around Salt Lake City, three.

In Houston, Felecia Ellis has been driving around on lunch breaks from a dental clinic looking for such a home in the $200,000-$250,000 range.

“Driving through a neighborhood, I’m like, ‘Oh, my god, this is a beautiful home, I know I can afford it,’” Ellis said. The answer in the listing, more often than not, is that, in fact, she can’t afford it.

The simplest way to put entrylevel housing on increasingly expensive land is to build a lot of it — to put two, three, four, or more units on lots that for decades have been reserved for one home.

The outcome would look more like housing built a century ago, with more duplexes, more row houses, more homeowners adding their own rental units.

“We need to shift our culture away from this dependency on single-family detached housing and thinking it’s the only solution,” said Daniel Parolek, an architect and author of a book on “missing middle” housing.

Parolek worked with the Utah builder, Holmes Homes, to design one model outside Salt Lake City. They rotated the more typical row house on its side, attaching small two-story homes along an intimate pedestrian path. The homes first came on the market in 2015 at about $200,000.

“It was a home run the minute we built them,” Nageli said. But costs have risen even since then. And the builder hasn’t repeated the concept elsewhere because most communities wouldn’t allow it.

From a builder’s view, there’s nothing particularly preferable about higher-end homes. Their profit margins aren’t generally higher. They’re riskier to build in economic downtimes. Entry-level housing, on the other hand, is invariably in deep demand.

If more communities permitted it, builders would return to that end of the market, Nageli said.

“We would be thriving in it,” he said.

‘You’ve basically regulated me out of anything remotely on the affordable side.’ JUSTIN WOOD, owner of Fish Construction NW