Commentary
I intended to provide insight into affordable housing and healthcare in my November 17, 2025, blog on affordability but my research resulted in so much material I quickly realized that to do justice to these subjects I needed the space to devote to them. I will be commenting on affordable healthcare soon.
But even after reviewing the wealth of information on these two areas, I saw how easy it would be for me to get ”into the weeds,” an expression writers use when trying to avoid too much detail. So, my goal is to simply enlighten you a bit on each topic.
Affordable Housing
When you recognize that affordable housing is an issue affecting millions of individuals and families across the United States you can understand why it is called a crisis. Rising rents, stagnant wages, and a shortage of available homes have made housing increasingly out of reach for many.
In my last blog, I explained that affordable housing is defined as housing in which the occupant is paying no more than 30% of their income for rent or mortgage.
Since the 2008 crisis, I understand, annual housing production has failed to come close to demand and nearly 20 years of underproduction has driven the severity of the crisis. Of course, the way out is to build more housing.
To better understand the crisis, you need to know specifically that there’s a lack of new housing construction, especially for those middle and low-income earners. And with the increasing demand, access to affordable financing is severely limited due largely to rising construction costs and land prices.
Private-Public Partnerships
Collaboration between governments, private developers, financial institutions, and community organizations is crucial. Public-private partnerships can leverage resources, share risks, and develop innovative financing models to support affordable housing projects.
One of the means for addressing the crisis that I have become familiar with is the Low-Income Housing Tax Credit Program (LIHTC). It is considered the most successful public-private partnership.
It provides various levels of subsidies to fund the construction and operations of rental properties, and, in return, the builder/owner agrees to keep the property affordable at certain income levels for a set period of time.
Generally, the higher the subsidy, the lower the income target. To put this in the context of a single-family home purchase, the government provides the equity (down payment) and the monthly rents provide money to make the mortgage payments. The higher the equity contribution, the lower the rents and the corresponding debt service on the property. Developers have high incentives to build quality and maintain properties as they can achieve a good return when finally sold.
Tax credits are used to entice billions of private capital into development of affordable housing. Financing partners can achieve tax efficiency (buy credits for less than face value) and in the case of banks, satisfy their community reinvestment requirements. Lots of interlocking and long-term incentives that drive success.
If it seems as though the need for more affordable housing is never satisfied, from administration to administration, you’re right.
In a memorandum the president issued just two days after taking office, he recognized the regulatory burdens and radical policies of the Biden administration. With it he ordered all federal agencies remove the constraints and improve affordability of necessary goods and services and increase the prosperity of American workers.”
As a political observer with limited knowledge of affordable housing, I hope I have given you a better understanding of the issue that for success it will require government policy reform and the easing of construction practices; but also, community engagement that shuns “not in my backyard” thinking, while promoting public-private partnerships.
Doing so will promote much desired home ownership, particularly helpful for middle-and low-income working-class households.
May God continue to bless the United States of America.
