Housing costs have risen dramatically in recent years, so that many people have been unable to buy a home. Part of this cost increase was due to the high rate of interest on home mortgages, which reached almost 20 percent in some areas of the country before dropping under 14 percent in 1983. Home Builders learn from other builders; successful ideas are copied and used in new ways by other builders in many different areas of the country. The affordable housing demonstrations have been developed to illustrate ideas for reducing housing costs in real projects and to provide information on the cost savings that resulted.

A large part of the increase, however, was due to other factors — rising costs of materials and labor, a reduction in the amount of land available for housing which has drastically increased lot prices, and changes in market patterns leading to larger homes on larger lots. Studies by the President·s Commission on Housing and by a special U.S. Department of Housing and Urban Development (HUD) Task Force on Housing Costs confirmed the findings of earlier studies showing that ways exist to cut the cost of housing. These studies also show, however, that out of date regulations and building practices frequently prevent these ideas from being applied. In fact, the studies pointed out that many builders and local officials do not even know about many of the ways that exist to reduce housing costs.