Housing experts from various political backgrounds are working to find solutions to the rising costs of homes and rents. Although their ideologies vary, policy experts agree on one key point: a major factor in the housing crisis is the lack of available housing supply. This housing supply shortage, exacerbated in recent years by the COVID-19 pandemic as remote work fueled demand for homeownership, has left millions of Americans struggling to find affordable housing.
Housing vouchers have long been a crucial support for low-income families, helping to close the gap between rental costs and what families can afford. However, vouchers alone cannot fix the problem if there aren’t enough homes to use them. To tackle the housing crisis, policymakers must address supply shortages and affordability through a dual approach that prioritizes expanding housing supply and improving the effectiveness of vouchers.
The housing affordability crisis has grown more urgent, with rents growing higher and climbing faster than general inflation over the past few years. Homeownership feels increasingly out of reach for millions, as the median price of an existing home was over $400,000 in November 2024, according to the National Association of Realtors.
Meanwhile, renters are bearing the brunt of this housing squeeze, with nearly half spending over 30% of their income on rent and a quarter dedicating over 50%. These rising costs are directly tied to supply shortages, as limited availability drives up rent and sale prices. Addressing this imbalance requires significant investment in housing development, especially in high-demand areas.
But investment alone can only go so far. State and local regulations and policies greatly diminish housing supply. For example, restrictive zoning laws, such as single-family zoning and limits on mixed-use development, prevent the construction of more diverse and affordable housing options. Houston is a great example of how a city can increase housing supply without overcomplicating the process. Unlike cities bogged down by single-use zoning and large lot requirements, Houston has taken a different approach that encourages smaller, higher-density housing. In 1998, the city reduced its minimum lot size from 5,000 square feet to just 1,400 square feet within its I-610 Inner Loop, later expanding this policy citywide. This small but meaningful change has made a big impact.
Between 2005 and 2018, Houston added nearly 75,000 new housing units within the Inner Loop alone. That’s double the number of new units built in San Francisco and Oakland combined during the same period, even though those cities have about the same land area. Houston’s reform allowed developers to replace single-family homes with up to three smaller detached houses or town homes, leading to the construction of 28,000 small-lot infill units—over a third of all new housing in the area.
What’s even more impressive is how these policies have helped keep housing affordable. Despite decades of rapid growth, Houston’s median home price is still below the national median, and rents are about half what they are in Los Angeles. It’s proof that light-touch density reforms can help cities grow while keeping costs down.
But this isn’t about building massive apartment complexes everywhere; it’s about making small, smart changes that add housing where they’re needed most. Historically, cities like New York in the 1920s and post-World War II suburban developments kept housing affordable by building at scale. Back then, permitting processes were simpler, and zoning accommodated growth instead of obstructing it. Today, fear of change and neighborhood resistance have slowed housing production to a crawl, particularly in areas where demand is highest. By 2023, per capita permitting rates were less than half of what they were in 1973, leaving supply woefully short of demand. Light touch reforms to permitting are key to encouraging much-needed housing supply.
Equally important is facilitating voucher use. The effectiveness of vouchers is often undermined by landlord reluctance to participate in the program. Many landlords cite administrative burdens, slow payment processing, and concerns about tenant reliability as reasons for opting out of accepting housing vouchers. This has created significant challenges for families trying to secure housing, especially in areas with tight rental markets or a shortage of moderately priced options. In some instances, landlords only accept vouchers for properties in less desirable locations, which restricts families’ access to safe and high-opportunity neighborhoods.
One solution for policymakers is local protections against voucher discrimination, like those implemented in Newark and Washington, D.C. In Newark, laws focused on source-of-income discrimination have reduced refusal rates to 31%, while in Washington, D.C., similar protections have brought refusal rates down to just 15%. DC has also adopted innovative policies, such as neighborhood-specific payment standards and higher “fair market rents,” which incentivize landlords in high-demand areas to participate in the program. These examples demonstrate how targeted legislation can significantly improve voucher acceptance and expand opportunities for families to live in safer neighborhoods with better resources and opportunities.
Nevertheless, these efforts are ineffective without a broader availability of affordable housing units to meet the demand. The scale of unmet needs is staggering: only one in four eligible households receives rental assistance, leaving millions of families without help. In 2021 alone, over 8.5 million very low-income households paid more than half their income on rent or lived in inadequate housing. These figures highlight that the housing crisis is not just about supply—it’s also deeply tied to affordability. Despite their benefits, vouchers often fall short of meeting rising rents, as adjustments to voucher amounts frequently lag behind housing market increases. In regions without sufficient housing supply, families with vouchers face steep competition for units, further limiting their ability to find stable housing.
Regional disparities compound this mismatch between voucher availability and housing supply. While metropolitan areas like Washington, D.C., and Newark have adopted policies like Small Area Fair Market Rents (SAFMRs) to align voucher values with local markets, many regions lag behind. In these areas, voucher holders typically face limited options, which reinforces existing inequities and restricts access to high-opportunity neighborhoods. To make vouchers more effective, policymakers must take deliberate action.
Rather than expanding subsidies in a system constrained by restrictive housing policies, efforts should focus on addressing the root causes of housing shortages. Expanding vouchers without increasing housing supply risks inflating costs and wasting taxpayer dollars on a system that is already under strain. Policymakers must instead tie efforts to improve vouchers directly to efforts that reduce supply restrictions, working toward a housing system where subsidies are more effective and ultimately less necessary.
Addressing the housing supply shortage is critical. Without enough units, families with vouchers will continue to struggle to find housing, and landlords retain significant power to discriminate. Increasing housing availability would reduce this power, making voucher programs more effective. Policymakers should enhance outreach programs for landlords to minimize administrative burdens and encourage participation, making voucher programs more accessible and appealing to property owners. Additionally, they should adopt measures prohibiting discrimination against voucher holders and invest in supportive services like housing navigation, tenant education, and community-based resources to help families maintain stable housing.
By simultaneously reducing supply restrictions and improving voucher programs, we can make housing subsidies more effective while reducing the overall need for them. A housing market that works for everyone not only lifts low-income families but also strengthens communities, reduces economic inequality, and fosters long-term stability for renters and homeowners alike. Achieving this vision will require bold reforms, significant investment in housing development, and thoughtful integration of subsidies—showing that innovation and compassion can go hand in hand.