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Why Increasing the Supply of Housing Will Not Solve the Affordable Housing Crisis – An Insight by Maxwell Drever

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Given the increased noise about the affordable housing crisis in America in recent years, some people may assume it is of recent origin. The fact is that America has been battling the problem for very long. Unfortunately, the COVID-19 pandemic has made it worse.

Increasing the Supply of Affordable Homes May Not Help Address the Problem

One solution proffered by the federal and state governments is to reform zoning and other regulations regarding land use to increase the supply of affordable housing. While there is no doubt it is important to increase the supply of affordable housing, especially in areas where housing costs are high, it is not likely to resolve the nation’s affordable housing problem, especially for the very needy. In reality, there is no shortage of housing in many parts of the country. The problem leading to the crisis is that millions of people do not earn enough to afford the properties available, says Maxwell Drever.

The Affordable Housing Crisis at Its Worst

Affordable housing crisis at its worst low income households

According to national statistics, 45% of all renters spend over 30% of their income – the affordability threshold. Around half of them spend more than half of their income on housing, which affects their ability to meet other essential needs. Close to two-thirds of renters paying half of their income or more earn less than $20,000, which is below the poverty line of a three-member family. Going by the 30% rule, a monthly rent of $500 is the maximum for a household earning $20,000. However, with the median rent in 2019 being $1,097, households would need to earn a minimum of $43,880 for housing to be affordable. Less than 10% of housing units have a monthly rental of $500 or less, and of these units, 31% are occupied by households in the $20,000-plus category, creating more pressure on low-income renters, observes Maxwell Drever.

Subsidies – An Immediate Solution

While it is clear that there have to be enough opportunities for low-income households to earn significantly more to be able to afford housing that gives them a basic quality of life, the problem is that kind of correction takes a long time to come into effect. With affordable housing assuming the proportions of a crisis all over the country, the only way renters will be able to live with dignity is by way of government subsidy vouchers. The current cost of building and operating even low-cost housing is much more than what low-income households can afford. The government needs to step up the funding of Section 8 vouchers issued to people who cannot afford their rents. While renters pay 30% of their income, the vouchers cover the balance of the rent. Unfortunately, despite the planned increases in the budget, it will still leave millions of renters unable to afford housing.


The affordable housing crisis is multi-dimensional. However, it is clear that the main issue is not in the supply of housing units but the lack of affordability by the renters. While the government must do all it can to improve the earnings of low-income people, it also needs to quickly address the mounting problem with improved funding for subsidy vouchers.

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