Affordable housing is one of the hottest topics in America, especially as home prices keep hitting record highs here and other places people most want to live.

The shortage of affordable housing affects millions of Americans, yet constructive responses are difficult to implement on a large scale. This is partly because of the complexity of the problem and also because of political differences in our closely divided country.

What’s really at issue is low- and lower-income housing: Housing priced below an area’s median household income ($92,263 in Seattle according to the Census Bureau).

Thus, the city defines affordable housing as units priced to cost no more than 30% of a household’s income. For a household of three, for example, that translates to $25,920.

By contrast, the average rent for a two-bedroom apartment in Seattle is about $44,000 a year, according to the tracking site Apartment List.

As a result, Seattle estimated that 35% of households here spent more than 30% of their gross income on housing as of 2019. Statewide, an estimated 49% of renters and 26% of homeowners are spending more than 30% of their income on housing. 


One major response here was the Mandatory Housing Affordability “grand bargain.” Essentially, developers received greater flexibility in zoning and project approval if they included lower-income units or paid fees. But it is making progress only slowly, according to an assessment by my colleague Daniel Beekman.

The millions in fees helped pay for 698 units beyond what was paid for by the city housing levy. But critics worried about displacement of historic neighborhoods and lack of preservation, while some developers found the program uneconomical and quit Seattle.

The city has also kept in place a pandemic moratorium on evictions (although it has done nothing to help small landlords pay their mortgages).

To be sure, affordability differs across the region. For example, rent in South Lake Union was more than $2,000 a month this past year. But it was $1,275 in Tacoma and similarly lower in outlying places. This shows a need for abundant transit, including light rail and commuter trains, to connect relatively affordable places with job centers.

The National Low Income Housing Coalition estimates that 6.8 million more units are needed for extremely low-income families nationally. Less housing is available for sale or to rent than at any time in the past 30 years. The shortfall is partly to blame for the rise in the unsheltered population.

At first glance, the housing shortage looks like it could be another example of market failure. After the housing crash of 2008, massive capital went into apartment construction. But these multifamily units at market rate were out of reach of many Americans. To be sure, the costs were also driven by higher material and labor costs, as well as soaring costs of land over the past decade.


The shortfall hearkens back to the Great Depression, when many families were left destitute.

The New Deal responded by building massive, though usually segregated, housing projects (Yesler Terrace in Seattle was the first racially integrated project in the United States when it was completed in 1940; it’s now being redeveloped to increase low-income units). This enterprise continued under President Lyndon Johnson’s “Great Society.”

Yet high crime in such notorious projects as Cabrini Green in Chicago and conservative and centrist presidential administrations after 1981 put an end to such grandiose efforts.

One replacement was the Clinton administration’s Hope VI, with housing on a smaller scale and with low-income units mixed with market-rate units. While this saw some individual successes, about 200,000 low-income apartments were eliminated, according to the Center on Budget and Policy Priorities.

In 1998, Congress passed the Faircloth Amendment to the 1937 Housing Act, which prohibits net increases in public housing.

Housing affordability has also become a roadblock to those once headed securely to the middle class.


After World War II, federal loan guarantees allowed millions of mostly white Americans to buy starter homes. This became the largest source of family wealth and people were able to move up to bigger, better houses as their economic fortunes improved.

But a combination of technology, industry consolidation and job losses from trade have eliminated huge numbers of middle-wage positions. Rungs have been sawed off the ladder up unless one works in a few sectors, such as finance or STEM.

Partly as a result, few homebuilders are now engaged in building starter homes. Rising labor and material costs, along with higher regulatory costs, also mean no more Levittowns (the prototypical starter-home subdivisions).

President Biden is moving on two fronts. First, he installed a new head of the Federal Housing Finance Agency who is committed to expanding loans to lower income homebuyers. Second, he wants to invest $318 billion in housing as part of his infrastructure plan. The aim is to produce or preserve 2 million low-income homes.

Meanwhile, Rep. Alexandria Ocasio-Cortez, Democrat of New York, has introduced a bill to repeal the Faircloth limits on new public housing construction. Both Biden’s plan and AOC’s legislation will have to get past Republican opposition.

The Urban Institute builds on these recommendations and adds others. For example, provide adequate funding to preserve existing low-income units; provide full replacement of low-income units in mixed-income redevelopments; engage tenants in redevelopment plans, and implement best practices in tenant relocations.


To the extent that conservatives admit a low-income housing problem, they blame liberal regulation. Or say that people should engage in home sharing.

Critics on the left argue that money alone won’t address the problem.

They advocate denser zoning and overcoming opposition to rezoning from NIMBYs in single-family neighborhoods. At the most extreme, the left wants to ban single-family zoning. To them, the status quo builds on a history of exclusionary policies, including redlining and deed covenants, aimed at keeping out minorities.

The history is undeniable and today liberal-left policies will play well (at least rhetorically) in blue Seattle. But like defunding the police, a war against single-family zoning pretty much ensures national Republican advantages.

But even if Republicans win the Congress in 2022 and the White House in 2024, the problem won’t go away.

Whether you call it affordable housing or low-income housing, the shortfall is an American crisis that requires major policy changes.