Affordable Housing - Core Insights

In talking about “affordable housing,” we must define our terms. A lot of people use this phrase (sometimes with a capital “A”) to mean subsidized housing or income-restricted housing. Others may mean it in the plain-English sense of housing that people can afford to live in without undue financial strain or sacrifice.

Building “Affordable” housing and achieving widespread housing affordability are not the same challenge and should not be confused. The supply of subsidized housing in the U.S. and Canada can serve only a small fraction of the number of households who struggle to afford housing on the private market, and it seems very unlikely that we have either the funding or political will to change that in the near future. Subsidy has a role to play, but solving the affordability crisis writ large is impossible without addressing the root causes of escalating prices in the private housing market.

The causes of widespread unaffordability are complex, but we can see a key role for a series of policy decisions closely associated with what Strong Towns calls the Suburban Experiment:

• The rise of restrictive zoning has prevented housing construction in many places where substantial demand exists (neighborhoods effectively frozen under glass), and has all but prohibited many relatively affordable types of homes from being built.
• Federal housing policy and institutional finance favor the mass production of single-family homes, while missing middle housing and other historically important parts of the mix must compete for access to capital on less favorable terms.
• The above financial and regulatory barriers have effectively restricted most housing production to a handful of large developers, building a handful of types of products, in a small minority of locations. It is difficult for small-scale builders to compete.
• Both local land-use policy and federal tax policy fundamentally regard real estate as an investment asset, and in many ways exert pressure to keep housing prices high and escalating. Those who would benefit from falling prices (renters and the poor) lack political power.

A central Strong Towns prescription is to allow incremental development everywhere, while buffering neighborhoods against the displacement and disruption caused by cataclysmic money.

We must make it so housing can again be created by many hands, in many forms, and in response to the urgent needs in our community via short feedback loops and rapid, incremental action.