Two Perspectives On The Housing Crisis: Affordable Housing vs Housing Affordability

The battlefield of the urban housing crisis is a confusing place to find oneself these days. At a time when American politics are as starkly divided as they have been in a century, housing politics do not fit comfortably into the familiar right-left narrative. Among a variety of constituencies, from older homeowning liberals to younger renting progressives, from free-market-loving developers to free-market-hating socialists, and every combination of identities in between, there are unique positions and perspectives.

What seems to unify all of these groups is a common desired outcome. Unlike seemingly every other public policy issue, virtually everyone says they want to see the housing crisis addressed. With the exception of the current HUD secretary, there is no overtly pro-high rents position. There is no broad political constituency that explicitly argues for higher rent (more on the broad political constituency that implicitly argues for higher rent at the end), and no elite intellectual tradition pushing for housing prices to rise inexorably out of reach.

But if this is so, then why do we disagree about housing policy? It’s because this broad agreement is often illusory. In reality, we don’t agree as much as we think, and these disagreements rarely are recognized. When we cannot honestly chart the contours of our disagreement, it makes it difficult to communicate and make progress. The miscommunication starts early on. Embedded in the language we use to describe and debate the very fundamentals of the problem are the roots of the discord.

Affordable Housing vs Housing Affordability

How would you describe the root of the urban housing crisis? Many people might describe the issue as a “lack affordable housing.” Others might say that “housing isn’t affordable.” Many people might use both phrasings interchangeably. But these two statements are not saying the same thing. The first statement treats “affordable” as a discrete category of housing, and diagnoses that there is not enough of it. The second statement applies to all housing, and diagnoses that it is all too expensive.

That small difference matters, because it can have significant consequences in how people see the issue and potential solutions. If you view the issue as being a “lack of affordable housing,” the obvious solution is to build more affordable housing—however you define it. You are also less likely to see the construction of more expensive housing as part of the solution, and you may see policies like loosening local zoning laws as municipal governments unilaterally disarming themselves of their best tool to coerce developers to build affordable units. In contrast, if you think the issue is that “housing isn’t affordable,” the obvious solution is to incentivize and legalize the construction of more housing of all shapes and sizes, broadly driving down rents through oversupply. You are also less likely to support policies like rent control and inclusionary zoning which are likely to lead to less housing overall.

Consider a hypothetical proposed 100 unit market rate apartment in a trendy part of town. The project has been given a dumb, abstract name, and the apartments will be advertised as “luxury” (here’s why you shouldn’t pay too much attention to marketing terms like “luxury”). If your view of the housing crisis is that there is not enough affordable housing, you might take a dim view of this proposal, which reserves no units for people of lower income. If your view of the housing crisis is that housing isn’t affordable, you might strongly support this proposal, believing that it will supply housing for over a hundred people who might otherwise have been forced to outbid incumbent residents for their housing somewhere else.

In governments at all levels across the United States, this debate is taking place constantly, and it makes some odd political bedfellows. Famously in California, leftist groups joined in a coalition with wealthy suburbs in opposition to a state bill that would have massively reformed local zoning laws to allow for much more housing construction. On a small scale, the same argument plays out week after week as towns and city boards debate individual projects and plans. Just a couple weeks ago, for example, a 44 unit housing project in the ostensibly progressive city of Berkeley was killed, in part because of a lack of affordable units. The site is currently home to a gas station.

Minneapolis-St. Paul is no exception. A recent letter written in opposition to the Minneapolis2040 Comprehensive Plan questioned whether the plan’s push for upzoning would lead to more affordable housing (and simultaneously worried about the plan reducing his property values). A recent Star Tribune article asked the same question. This confusion is understandable, and these concerns are not necessarily wrong as they are expressed. A policy of upzoning Minneapolis would not directly create any legally mandated units of “affordable housing.” But this is the miss the forest for the trees, because upzoning would improve housing affordability citywide by allowing the market to use many more forms of housing to meet demand than is currently permitted.

Perhaps the most succinct single example of the confusion surrounding the give-and-take of affordable housing and housing affordability was last year’s debate on the future zoning of the Ford Site in St. Paul. At the final vote, Councilman Dai Thao successfully passed an amendment to the zoning plan that would mandate higher inclusionary zoning percentages. He then voted against that same zoning plan—which included his amendment—because it called for too much density.


What Is Affordable Housing Anyway?

Before we can attempt to reconcile these two viewpoints, we ought to be on the same page about what they mean and what they accomplish. There are few terms that have as many meanings as the one that is most central to the discussion; “affordable housing.” What is an affordable home? What does it look like? Where is it located? What does it cost?

There may not be easy answers. Every household is different, with different incomes, different expenses, different needs and wants. To boil these down across a population to something discrete and definable as “affordable housing” is probably an impossible task. It’s blindingly obvious that what is affordable for Minnesota Timberwolves owner Glenn Taylor is not affordable for me. It’s easy to be pedantic about this, but the point is that what counts as “affordable” is completely unique to every household and their circumstances.

It’s difficult to define affordable housing by superficial characteristics. Affordable housing does not come in a recognizable architectural style (sometimes, people mistake affordable housing for more expensive housing), although some styles of building are cheaper than others.  Affordable housing can exist in any city and any neighborhood, although the particulars of any given location (is a car required to get there? what are the utility costs? etc.) can make a big difference to the overall cost of living at that location.

Most commonly, when people use the words “affordable housing” they mean “subsidized housing.” This might mean housing units that are targeted at people who earn less than the metro area’s median income, as mandated by an inclusionary zoning law or by an agreement made along with the sale of the property, where the developer provides the subsidy (or more realistically, passes it on to the other tenants) or acquires the land for below market value with the stipulation that those savings be passed to the tenants. Or it might mean homes financed with low income housing tax credits (LIHTC) or rents paid partially with Section 8 vouchers, which are government programs. But not all “affordable housing” is subsidized. In some urban areas, new market rate housing might be available to people with below-average incomes because that’s simply where the market is. In many places you can find “naturally occurring affordable housing” (NOAH), which is perfectly serviceable market rate housing that is widely affordable because it happens to be old or in an out-of-fashion style.

Of course, ultimately any definition of “affordable housing” must come down to cost. Can we settle upon a definition for “affordable housing” that is both true to the experiences of all people who struggle paying their housing costs, and also fine grained enough so that it becomes useful as a measure of policy and analysis?

The broadest point of agreement is probably to say that “affordable housing” is best defined as housing that people can rent for less than 30% of a below-median income. But that’s a definition that in and of itself doesn’t seem too helpful, because that still encompasses a massive number of people with very different needs. Much of what a median single earner can afford is not affordable for a family earning far below the median. This is a definition of “affordable housing” that is all-encompassing and truest to the problem. But it is so unspecific as to be unhelpful from the perspective of making policy.

The most precise way to describe “affordable housing” is to explain exactly what income range it’s for. Most housing that is subsidized in some way is described in terms of “area median income” or AMI, which is calculated as a single number across a metropolitan region (there’s a strong argument being made that AMI should be calculated at the zip code level). A developer might promise, for instance, to reserve twenty percent of units in a new building for tenants making 60% AMI, for a period of thirty years. This is a highly specific definition that can be useful for making policy. But what we gain in specificity, we lose in wide applicability for public policy. There is a broad range of people who struggle with paying the rent or the mortgage, who span a broad range of incomes and family situations, and it’s hard to tune a policy around AMI to meet all of these specific needs.

The difficulty in establishing a true and useful definition of “affordable housing” should clue us in to the difficulty of establishing any kind of policy regime that treats it as a discrete category of housing. To more clearly communicate in discussions and advocacy about affordable housing, we should be more precise about exactly what kind of housing is being discussed, where it is, and what it costs.


Who Is Housing Affordability For Anyway?

Housing comes in all shapes, sizes, and locations, and at any number of different price points. Almost all housing in any given metro area exists on this spectrum, and because even the wealthiest households usually occupy just a single unit of housing in that metro (there are exceptions), increases in supply will not be to be horded and kept out of the market by the wealthy. It makes sense that “supply-side” policies will lead to reductions in price for everyone.

But a focus on housing affordability alone misses other aspects of the housing crisis that are important.

A recent chart presented to the Minneapolis City Council demonstrated the numbers of people in the city at various income levels who are cost burdened (spend 30% of their income on housing) and extremely cost burdened (spend over 50% of their income on housing). Unsurprisingly, the majority of households making below 30% AMI—about 20,000 households making just $28,300 a year for a family of four—are extremely cost burdened by their housing. Another six thousand or so are simply cost burdened. This is a problem that is immediate. For these thousands of households the lesser problem is a housing market that is distorted, the larger problem is deep poverty.

Easing the local housing market will help these households in an indirect way, but direct help is also needed. There are a variety of “demand-side” policies such as vouchers for rental assistance, housing navigation and counselling agencies to help tenants find or keep units, and one time rental assistance for security deposits, first and last month’s rent, that could help these households.

Complicating the supply versus demand needs further are fundamental challenges such as discrimination and predatory behaviors. Legal measures are essential to protect these vulnerable residents from eviction or mistreatment by property owners. No matter the method of assistance, housing for very low income households is nearly certain to require government subsidy and government oversight. For households in deep poverty, it’s not just a matter of housing not being affordable, there really is a lack of affordable housing.

It also matters a great deal where affordable housing is located. In cities across the country housing is deeply segregated along racial lines. This is a deliberate consequence of housing policies pursued at federal, state, and local levels since the Civil War, but with the most breadth in the middle of the last century. African-Americans were systematically prevented from building generational wealth through homeownership, and concentrated into inner-city ghettos as a matter of public policy. These racially concentrated areas of poverty have historically received inadequate city services, from hostile policing to poor schools. Undoing this shameful legacy will require a similarly strong and intentional reaction from public policy.

One of the key strategies for reversing residential segregation must be to build or acquire affordable housing in higher income, segregated areas. Policies that undo exclusionary zoning and allow cheaper multi-family development in exclusive, predominantly white single family home neighborhoods are welcome. But deliberate siting of subsidized affordable housing in these neighborhoods is also important. This has to be an explicit goal of these subsidies, because in cities across the county (Washington DC provides a stark example in the tweet above), affordable housing is usually built in already poor or mixed income areas. Here too is another area in which what matters is not just broad-based housing affordability, but direct policy intervention devoted to affordable housing.


Producing Affordable Housing and Allowing for Housing Affordability Should Be Complimentary Goals

Above, I’ve tried to show how how both perspectives on the urban housing crisis are valuable. To solve such an enormous and multi-faceted problem, both affordable housing and housing affordability are needed, and they are needed everywhere. But reconciling the two should not simply be a matter of reluctant compromise. Instead, we need to recognize the ways in which both strategies are important to achieving the goals of the other.

For one, funds for producing affordable housing are scarce. Even with large budget increases for affordable housing, the amount allocated is not commensurate with the problem (this building alone cost $54 million). That leaves two options—find ways to throw even more money at the problem, or find ways to reduce the size of the problem. That’s where measures to improve housing affordability come in. If the cheapest end of new market-rate housing is affordable to households making 60% AMI, than fewer households earning that amount will need assistance, and that frees up more dedicated affordable housing money to be spent on households who need the help more. Not to mention that more market rate development means more money for the city, some of which can be used to support affordable housing initiatives.

Producing affordable housing also can make housing more affordable overall. Households with very low incomes are especially vulnerable because the housing market produces few options for them. That lack of choice can lock these households into predatory situations, for instance where landlords raise rents and defer maintenance, knowing that their tenants have few options to move away, and may not be able to afford a move anyway. From the second half of the twentieth century and continuing even to the present day, African-Americans homeowners and renters on average paid significantly more for their homes or in rent than did whites for similar properties, because they simply had far less choice. But increases in governmental assistance and governmental enforcement (a “public option,” if you will) can provide new, better options for very low income households. That increased competition and oversight would make it significantly harder for landlords to take advantage of very low income tenants, because those tenants would have newfound power to pack up and leave for better options.

Policies that aim to produce affordable housing and policies that aim to improve housing affordability can work symbiotically to achieve each other’s goals. But not all policies work along both tracks. Rent control is one such policy. While it may lock in affordable housing for a select set of incumbents, it makes housing less affordable for everyone else. Badly designed inclusionary zoning policies may have a similar effect. On the flip side, unfettered housing markets can have destructive effects on lower income neighborhoods that are not prepared for them. While building new housing improves housing affordability on a regional level, there is some evidence that it may increase prices locally, as a previously unattractive neighborhood becomes more attractive. These concerns are not irrelevant, nor are concerns about shifting power dynamics in high growth neighborhoods. Policies that engage incumbent residents on the question of how (as opposed to whether) the neighborhood develops are the best way to work through this tension.


A Better Coalition

In the present day, housing advocates on both sides of this debate have to understand that they stand a better chance of achieving progress by working together. Although there is no expressly high rent advocacy group, high rents are nonetheless winning in a rout. Funds for subsidized housing are incredibly small, and housing supply is incredibly limited. That’s because there is a de facto high rent advocacy group made up of single family homeowners and some large developers, who benefit from high priced housing. The rhetorical battle between affordable housing and housing affordability often gives these groups cover, whether they are arguing in bad faith or a lack of understanding, they benefit from the stasis. One benefit of clearer communication and stronger alliances between affordable housing and housing affordability advocates is that it ought to clarify exactly who stands where, and more clearly illuminate the tradeoffs and sacrifices of local housing policy. If affordable housing and housing affordability advocates obstruct each other, little is likely to change. But if both causes become linked—you cannot support affordable housing without supporting housing affordability and visa versa—a better, more effective coalition will emerge.

This alternative approach must begin with clear speaking about our priorities. Recognizing the differences between “affordable housing” and “housing affordability” and educating the public and policy makers about the multiple sides of the issue is essential. Only from a shared understanding can we create a coalition that works on policies that advance both goals—more funds for affordable housing, new tenant protections, inclusionary zoning in areas that can support it, inclusionary zoning with density bonuses or permitting advantages, upzoning for mid-rise buildings, upzoning for low-cost multifamily buildings like fourplexes, abolishing parking minimums, and others—ultimately building a city with more room and more opportunity for everyone.

Alex Schieferdecker

About Alex Schieferdecker

Alex Schieferdecker is a transportation planner. He grew up in New York City, lived in Philadelphia for seven years, and now lives in Minneapolis. His twitter handle is @alexschief. He is on BlueSky at