To improve housing affordability, we need better alignment of zoning, taxes, and subsidies
January 01, 2020 by Rising housing costs relative to incomes are increasingly burdening U.S. families, with nearly half of renter households spending over 30% of their income on rent by 2017, meeting HUD’s definition of being “cost-burdened.” This affordability crisis extends beyond low-income renters to affect middle-income households in thriving urban areas, where access to high-opportunity communities is crucial for better economic outcomes, especially for children. However, insufficient housing construction in these desirable areas forces lower- and moderate-income individuals to seek affordable housing further from job centers, increasing commuting costs and time. Addressing these challenges requires aligning three key housing policies: reforming zoning laws to allow for more compact and affordable housing types, implementing land value taxes to incentivize denser development on expensive land, and expanding housing subsidies for low-income families. Such alignment could mitigate affordability pressures, enhance urban housing accessibility, and promote economic equity across communities.