Joshua Columbus
Alex Korman
English 102
The Capitalization of the Cost-Burdened
Harvard's Joint Center for Housing Studies released a stark report on the current position of the housing market, in an annual publishing called the State of the Nation's Housing. The most remarkable data in the report states that there has been a 60% increase in home prices since 2019 and that the median single family home value reached $412,500 in 2024 (HJCHS). This home value lays out a new median price-to-income ratio, which is equal to five times the median household income. A price-to-income ratio of 3 is generally considered affordable, which means that the median price-to-income ratio is 60% higher than the affordable standard. In 2023, the number of cost-burdened homeowners (those spending more than 30 percent of income on housing and utilities) increased by 646,000 to 20.3 million, which is now 24 percent of all homeowner households. Though this data quantifies a dark interpretation of the housing market today, there are direct actions that local, state, and federal governments can take to mitigate these issues. To address the problematic state of our national housing market, it is necessary to protect vulnerable households, rethink the current housing assistance system, and reform restrictive zoning laws to balance the supply and demand of the affordable housing market.
The inflated costs of homeownership can be partially attributed to steep increases in insurance premiums and property taxes. According to Freddie Mac, the government-sponsored home buyer, home insurance premiums jumped 57 percent from 2019 to 2024. This is caused by rising construction costs and frequency of disasters, which cause the insurers to raise premiums, reduce coverage or pull out of markets entirely (HJCHS).
Though households with lower incomes make up a majority of cost-burdened households, the tension caused by insurance premiums and lack of supply in the housing market is affecting more middle-income households. In 2023, the number of cost-burdened renters reached a new record high for the third consecutive year, reaching 22.6 million renters, 12.1 million of which are severely burdened (spending more than half of their income on housing and utilities (HJCHS). According to the State of the Nation Report, the outlook for housing is inextricably linked to the economy and federal policy.
One of the main disadvantages for the average homebuyer or renter is the increasing wage gap between lower-, middle- and high-income residents. Most employees' wages are consistently tightening, while the highest-ranking employees' wages are becoming disproportionately higher. This contrast becomes clear when we quantify this, and even more clear when we visualize it. In 2021, the top 90% of workers earned a total of 58.6% of total earnings, while the top 5% earned a total of 29.9% (EPI). Furthermore, from 1979 to 2021, the top 1% of earners went from 7.3% to 14.6% of total earnings (EPI). As you can see, there are many disadvantages and vulnerabilities for the average American in relation to the affordability of housing. As the wage gap increases along with home prices, homeownership becomes out of reach for more people in the current market. However, this is just one disadvantage, and there are many ways to dispel the causes of the lack of affordability.
One strategy that is used by the federal government to support vulnerable families that are unable to afford housing is Section 8 Housing Vouchers. Vouchers provide relief in the short term but have shortfalls in the long term. By subsidizing the rental costs imposed on renters and regulating landlord profits, government housing vouchers support low-income households and bar landlords from charging more than 30% of the resident's adjusted income for rent. However, due to a lack of funding, only one out of three eligible families receive assistance through vouchers, leaving two out of three households without relief. Furthermore, there is a shortage of moderately priced rentals, a lack of willingness to accept vouchers, racial/ethnic discrimination, and generally tight market conditions, some families with vouchers are unable to find a residence for which to use the vouchers (Turner). Section 8 Housing Vouchers can be considered effective in the short term, but unsustainable in the long term. This leaves a missing piece of the puzzle in the national pursuit of affordable housing.
It is logical to ask why rental costs are so high in the current market with respect to the ever-increasing wage gap. One challenge that we face in creating a balanced housing market is magnified in the construction process. Freddie Mac estimates that the U.S. needs 3.8 million residential units for the supply to meet the demand (Merrefield). This mismatch in supply and demand incentivizes landlords to increase rent prices. On top of this, the construction process of new residential complexes is specifically challenging because the conditions under which residential property construction must be carried out must be near perfect. For example, as mentioned in the HJCHS State of the Nation's Housing report, restrictive zoning and EPA grants must permit the project. The restrictive zoning legislation and high barrier to entry for construction permits should be considered and reformed to build a fruitful housing supply and to avoid rent hikes in the long term.
A notable attempt by state and local governments to regulate rent prices is through rent control legislation, which caps the profit a landlord can make, but creates a paradoxical result. Rent control can be defined by the regulatory effort to set a maximum amount of profit that landlords can make on rental units. Although it might seem logical that this legislation would result in the stagnation of rental increases, the market had an opposing reaction. Rent control legislation has shown to cause landlords to pull rental units off the market and evict tenants through "move-in eviction" (when a landlord displaces the tenant from the property to use the property for something else. This is normally to switch their unit to a condominium or short-term rental to avoid profit maximization (NBER). This strategy poses a chronological issue: should landlords be able to evict freely and raise rent prices without consequence?
Social insurance, a government-subsidized program for large rent increases can still allow landlords to raise their rent respectively but prevent the tenant from being evicted due to their inability to pay their rental costs. These regulatory efforts provide better long term solutions with respect to the Section 8 Housing Vouchers and regulatory control efforts because the landlord is likely already in a lease agreement with the tenants, the funding will get stretched a farther distance because there is no move-in costs, and the program works as a targeted subsidy, avoiding the tradeoffs of traditional rent control (NBER). Now that we have addressed the current and past efforts to mitigate the rental costs for low-income families in the short and long term, let us analyze a new solution proposed by Harvard's Joint Center for Housing Studies.
Harvard's Joint Center for Housing Studies proposes that the construction of middle housing is the key to the achievement of national housing affordability. The term middle housing refers to the missing residential buildings that are necessary to create a balanced market. This includes anything from duplex housing and sixplex housing, townhomes, and many other building types between a detached single-family home and a midrise apartment building (HJCHS).
The missing middle housing serves to provide housing to a wide range of income levels and ages. It also contributes to walkability, lower car emissions, and can support a more equitable housing market (Tomasso). The proposed benefits associated with the construction of middle housing point towards a more sustainable society in terms of housing and human-generated climate change.
Using Massachusetts as an example, we can illustrate the necessity for the streamlining of middle housing construction in metropolitan areas across the country. In February 2025, Governor Maura Healey's Housing Advisory Council called for the construction of 22,000 homes per year throughout the next decade. Coupled with the fact that Massachusetts only permitted around 11,000 units in recent years, we can see a stark contrast and a logical deduction that our legislation is creating a barrier for the supply in the housing market (Tomasso).
An excellent example success in legalizing middle housing is in Oregon. According to Harvard's Joint Center for Housing Studies' Legalizing Middle Housing Part 2 report, Oregon was the first state in the nation to pass mandatory statewide middle reforms in 2019 with HB 2001. This bill allows alternatives to single-family homes and sets a standard for mid-sized and large cities. In cities with a population greater than 10,000, duplexes are permitted in single-family residential zones within urban growth boundaries. In cities with a population greater than 25,000, middle housing types are permitted in all residential zones (Tomasso). This is exactly the legislative efforts we must see to allow the construction of new affordable housing, along with deregulation efforts relating to the zoning of properties.
According to the Sightline Institute, a Pacific Northwest policy think tank, housing will remain excessively expensive until the land underpinning the housing, the value of which is determined by zoning regulation, or what is allowed to be built on the land- decreases at a regional market level (Tomasso). Until these zoning restrictions are considered through a context-specific collaborative effort between local, state federal governments, the national housing market will remain unsustainable.
The president's administration is beginning to deregulate housing, in an effort to address national housing issues. According to a report from Housing Matters, an Urban Institute Initiative, Trump's Administration released a memorandum that directs its executives to "pursue appropriate actions to lower the cost of housing and expand housing supply." The focus of the memorandum is deregulation, which can lower land prices and construction costs (Urban Institute). This could lead to lower land prices, and it has shown that local land regulations account for 60% of property values (Urban Institute).
There are potential tradeoffs of deregulation, which include the potential for increased land and home value. This possibility highlights further necessity for attention at the local and state levels in subsections of city areas throughout the deregulation process. As deregulation occurs, the lack of zoning restrictions could have the opposite of the desired effect in certain areas, thus the need for attention to each case from the lower levels of government (Urban Institute).
We can see a recent example deregulation of zoning legislation and middle housing construction companies in Maine in the last couple of weeks. GreenMars Real Estate and Acadia Realty Partners cut the ribbon on a group of 21 standalone condominiums in Wilbur's Woods in Brunswick. The price of these standalone units are $325,000, which is intended to be utilized by households that earn less than $105,360 annually (Fischer). The project was supported by the state Affordable Homeownership Program, an initiative of the Maine Jobs and Recovery Plan, administered through MaineHousing. This is a great example of affordable housing construction companies collaborating with state and local governments and communities.
The co-founder of GreenMars, Chris Marshall, accredited Governer Janet Mills and Speaker of the Maine House Ryan Fecteau, along with several other partners on the development. He also noted that an 18-unit multi-family apartment complex for middle-income households is the next phase of development (Fischer).
Projects like this add diversity to the housing market and bring middle-income households closer to the possibility of homeownership. To achieve affordable housing, all levels of government must support these projects and lift the restrictive legislation that serves as an obstacle to them. This is our best solution thus far in the battle for affordable housing. It does not provide immediate relief for low-income households like Section 8 Housing Vouchers do, but affordable housing construction provides a balance in the market that will relieve some of the tension that causes landlords to raise their rent prices by increasing the much-needed supply of housing.
To maximize housing affordability in the long term, we must combine federal, state, and local legislative efforts to protect vulnerable households, rethink the current housing assistance system, and reform restrictive zoning laws to balance the supply and demand of the housing market in the long term. Without these efforts, the bleak trend we see in the housing market in current reports will continue, and homeownership will continue to move out of reach for more people every year. Examples like Maine and Oregon prove that it can be done and imply the national need for supply in the housing market. In Maine, all the standalone condominiums have been sold except for one (Fischer). We must follow in the footsteps of these affordable housing projects to place the missing piece in puzzle and solve the problematic state of the nation's housing.
Works Cited
Alex Korman
English 102
The Capitalization of the Cost-Burdened
Harvard's Joint Center for Housing Studies released a stark report on the current position of the housing market, in an annual publishing called the State of the Nation's Housing. The most remarkable data in the report states that there has been a 60% increase in home prices since 2019 and that the median single family home value reached $412,500 in 2024 (HJCHS). This home value lays out a new median price-to-income ratio, which is equal to five times the median household income. A price-to-income ratio of 3 is generally considered affordable, which means that the median price-to-income ratio is 60% higher than the affordable standard. In 2023, the number of cost-burdened homeowners (those spending more than 30 percent of income on housing and utilities) increased by 646,000 to 20.3 million, which is now 24 percent of all homeowner households. Though this data quantifies a dark interpretation of the housing market today, there are direct actions that local, state, and federal governments can take to mitigate these issues. To address the problematic state of our national housing market, it is necessary to protect vulnerable households, rethink the current housing assistance system, and reform restrictive zoning laws to balance the supply and demand of the affordable housing market.
The inflated costs of homeownership can be partially attributed to steep increases in insurance premiums and property taxes. According to Freddie Mac, the government-sponsored home buyer, home insurance premiums jumped 57 percent from 2019 to 2024. This is caused by rising construction costs and frequency of disasters, which cause the insurers to raise premiums, reduce coverage or pull out of markets entirely (HJCHS).
Though households with lower incomes make up a majority of cost-burdened households, the tension caused by insurance premiums and lack of supply in the housing market is affecting more middle-income households. In 2023, the number of cost-burdened renters reached a new record high for the third consecutive year, reaching 22.6 million renters, 12.1 million of which are severely burdened (spending more than half of their income on housing and utilities (HJCHS). According to the State of the Nation Report, the outlook for housing is inextricably linked to the economy and federal policy.
One of the main disadvantages for the average homebuyer or renter is the increasing wage gap between lower-, middle- and high-income residents. Most employees' wages are consistently tightening, while the highest-ranking employees' wages are becoming disproportionately higher. This contrast becomes clear when we quantify this, and even more clear when we visualize it. In 2021, the top 90% of workers earned a total of 58.6% of total earnings, while the top 5% earned a total of 29.9% (EPI). Furthermore, from 1979 to 2021, the top 1% of earners went from 7.3% to 14.6% of total earnings (EPI). As you can see, there are many disadvantages and vulnerabilities for the average American in relation to the affordability of housing. As the wage gap increases along with home prices, homeownership becomes out of reach for more people in the current market. However, this is just one disadvantage, and there are many ways to dispel the causes of the lack of affordability.
One strategy that is used by the federal government to support vulnerable families that are unable to afford housing is Section 8 Housing Vouchers. Vouchers provide relief in the short term but have shortfalls in the long term. By subsidizing the rental costs imposed on renters and regulating landlord profits, government housing vouchers support low-income households and bar landlords from charging more than 30% of the resident's adjusted income for rent. However, due to a lack of funding, only one out of three eligible families receive assistance through vouchers, leaving two out of three households without relief. Furthermore, there is a shortage of moderately priced rentals, a lack of willingness to accept vouchers, racial/ethnic discrimination, and generally tight market conditions, some families with vouchers are unable to find a residence for which to use the vouchers (Turner). Section 8 Housing Vouchers can be considered effective in the short term, but unsustainable in the long term. This leaves a missing piece of the puzzle in the national pursuit of affordable housing.
It is logical to ask why rental costs are so high in the current market with respect to the ever-increasing wage gap. One challenge that we face in creating a balanced housing market is magnified in the construction process. Freddie Mac estimates that the U.S. needs 3.8 million residential units for the supply to meet the demand (Merrefield). This mismatch in supply and demand incentivizes landlords to increase rent prices. On top of this, the construction process of new residential complexes is specifically challenging because the conditions under which residential property construction must be carried out must be near perfect. For example, as mentioned in the HJCHS State of the Nation's Housing report, restrictive zoning and EPA grants must permit the project. The restrictive zoning legislation and high barrier to entry for construction permits should be considered and reformed to build a fruitful housing supply and to avoid rent hikes in the long term.
A notable attempt by state and local governments to regulate rent prices is through rent control legislation, which caps the profit a landlord can make, but creates a paradoxical result. Rent control can be defined by the regulatory effort to set a maximum amount of profit that landlords can make on rental units. Although it might seem logical that this legislation would result in the stagnation of rental increases, the market had an opposing reaction. Rent control legislation has shown to cause landlords to pull rental units off the market and evict tenants through "move-in eviction" (when a landlord displaces the tenant from the property to use the property for something else. This is normally to switch their unit to a condominium or short-term rental to avoid profit maximization (NBER). This strategy poses a chronological issue: should landlords be able to evict freely and raise rent prices without consequence?
Social insurance, a government-subsidized program for large rent increases can still allow landlords to raise their rent respectively but prevent the tenant from being evicted due to their inability to pay their rental costs. These regulatory efforts provide better long term solutions with respect to the Section 8 Housing Vouchers and regulatory control efforts because the landlord is likely already in a lease agreement with the tenants, the funding will get stretched a farther distance because there is no move-in costs, and the program works as a targeted subsidy, avoiding the tradeoffs of traditional rent control (NBER). Now that we have addressed the current and past efforts to mitigate the rental costs for low-income families in the short and long term, let us analyze a new solution proposed by Harvard's Joint Center for Housing Studies.
Harvard's Joint Center for Housing Studies proposes that the construction of middle housing is the key to the achievement of national housing affordability. The term middle housing refers to the missing residential buildings that are necessary to create a balanced market. This includes anything from duplex housing and sixplex housing, townhomes, and many other building types between a detached single-family home and a midrise apartment building (HJCHS).
The missing middle housing serves to provide housing to a wide range of income levels and ages. It also contributes to walkability, lower car emissions, and can support a more equitable housing market (Tomasso). The proposed benefits associated with the construction of middle housing point towards a more sustainable society in terms of housing and human-generated climate change.
Using Massachusetts as an example, we can illustrate the necessity for the streamlining of middle housing construction in metropolitan areas across the country. In February 2025, Governor Maura Healey's Housing Advisory Council called for the construction of 22,000 homes per year throughout the next decade. Coupled with the fact that Massachusetts only permitted around 11,000 units in recent years, we can see a stark contrast and a logical deduction that our legislation is creating a barrier for the supply in the housing market (Tomasso).
An excellent example success in legalizing middle housing is in Oregon. According to Harvard's Joint Center for Housing Studies' Legalizing Middle Housing Part 2 report, Oregon was the first state in the nation to pass mandatory statewide middle reforms in 2019 with HB 2001. This bill allows alternatives to single-family homes and sets a standard for mid-sized and large cities. In cities with a population greater than 10,000, duplexes are permitted in single-family residential zones within urban growth boundaries. In cities with a population greater than 25,000, middle housing types are permitted in all residential zones (Tomasso). This is exactly the legislative efforts we must see to allow the construction of new affordable housing, along with deregulation efforts relating to the zoning of properties.
According to the Sightline Institute, a Pacific Northwest policy think tank, housing will remain excessively expensive until the land underpinning the housing, the value of which is determined by zoning regulation, or what is allowed to be built on the land- decreases at a regional market level (Tomasso). Until these zoning restrictions are considered through a context-specific collaborative effort between local, state federal governments, the national housing market will remain unsustainable.
The president's administration is beginning to deregulate housing, in an effort to address national housing issues. According to a report from Housing Matters, an Urban Institute Initiative, Trump's Administration released a memorandum that directs its executives to "pursue appropriate actions to lower the cost of housing and expand housing supply." The focus of the memorandum is deregulation, which can lower land prices and construction costs (Urban Institute). This could lead to lower land prices, and it has shown that local land regulations account for 60% of property values (Urban Institute).
There are potential tradeoffs of deregulation, which include the potential for increased land and home value. This possibility highlights further necessity for attention at the local and state levels in subsections of city areas throughout the deregulation process. As deregulation occurs, the lack of zoning restrictions could have the opposite of the desired effect in certain areas, thus the need for attention to each case from the lower levels of government (Urban Institute).
We can see a recent example deregulation of zoning legislation and middle housing construction companies in Maine in the last couple of weeks. GreenMars Real Estate and Acadia Realty Partners cut the ribbon on a group of 21 standalone condominiums in Wilbur's Woods in Brunswick. The price of these standalone units are $325,000, which is intended to be utilized by households that earn less than $105,360 annually (Fischer). The project was supported by the state Affordable Homeownership Program, an initiative of the Maine Jobs and Recovery Plan, administered through MaineHousing. This is a great example of affordable housing construction companies collaborating with state and local governments and communities.
The co-founder of GreenMars, Chris Marshall, accredited Governer Janet Mills and Speaker of the Maine House Ryan Fecteau, along with several other partners on the development. He also noted that an 18-unit multi-family apartment complex for middle-income households is the next phase of development (Fischer).
Projects like this add diversity to the housing market and bring middle-income households closer to the possibility of homeownership. To achieve affordable housing, all levels of government must support these projects and lift the restrictive legislation that serves as an obstacle to them. This is our best solution thus far in the battle for affordable housing. It does not provide immediate relief for low-income households like Section 8 Housing Vouchers do, but affordable housing construction provides a balance in the market that will relieve some of the tension that causes landlords to raise their rent prices by increasing the much-needed supply of housing.
To maximize housing affordability in the long term, we must combine federal, state, and local legislative efforts to protect vulnerable households, rethink the current housing assistance system, and reform restrictive zoning laws to balance the supply and demand of the housing market in the long term. Without these efforts, the bleak trend we see in the housing market in current reports will continue, and homeownership will continue to move out of reach for more people every year. Examples like Maine and Oregon prove that it can be done and imply the national need for supply in the housing market. In Maine, all the standalone condominiums have been sold except for one (Fischer). We must follow in the footsteps of these affordable housing projects to place the missing piece in puzzle and solve the problematic state of the nation's housing.
Works Cited
