Community development practitioners have long understood that our work is rooted in both economic and housing justice, recognizing that a good job and economic stability go hand in hand with safe, affordable, and dignified housing.
A new working paper published by the London School of Economics and Political Science, authored by urban planners Maximilian Buchholz, Tom Kemeny, Gregory Randolph, and Michael Storper, affirms that wages and housing affordability are linked. The authors find that rising incomes among the 40 percent of the population with college degrees provide a much stronger explanation for rising housing prices than regulations constraining supply.
Indeed, the impact of increasing market-rate housing supply is surprisingly limited. To examine this question, the authors simulate how much an increase in housing supply will reduce housing costs using estimates from a wide range of academic studies. Their findings are unequivocal. As the authors write, “In the San Francisco Bay Area, where the mismatch between prices and non-college wages is the largest, even under the highly optimistic lower bound scenario it would take about 20 years for house prices to become widely affordable; under the upper bound scenario, it would take over 100 years.”
In case the implications of their analysis are not clear, the authors add that “interventions focused on market-rate supply alone are unlikely to generate widespread affordability in any meaningful timeframe.”
The authors then turn their attention to housing costs and income growth and find a much stronger relationship. They find that a 1 percent increase in average incomes translates into a roughly 1 percent increase in average housing prices. However, income growth has been highly unequal. High-income workers have experienced very strong income growth, while low-wage workers have seen their incomes stagnate (in addition to an overall increase in work precarity). The authors argue that the housing market is functioning normally by historical standards, with landlords and developers raising prices in response to the growing purchasing power of high earners. As wealth becomes concentrated at the top, housing prices increase, making housing less affordable for the rest of us.
To be clear, this is not an argument against land use reforms such as inclusionary zoning. Realtors, developers, and investors have used local and federal housing regulations to drive racial segregation and concentrate wealth and power in white communities, for which reparations are long overdue. Rather, the paper argues that affordability is not fundamentally a housing supply issue that can be solved with deregulation—inequality is the primary driver.
This is significant because how the issue of housing affordability is understood shapes advocacy strategies. If inequality is the main driver of housing prices, then deregulatory policy fixes miss the mark. For housing advocates, this changes the policy solutions advanced, the coalitions that must be built, and ultimately the systems for housing that must be developed.
How Housing Advocates Can Advance Affordability
The study findings are reinforced by other analyses, such as a 2026 Federal Reserve Bank of San Francisco economic letter showing that housing prices have tracked almost exactly with mean (average) income, but have greatly exceeded the rise of median income. As a result, housing is becoming increasingly unaffordable for families at or below that median income range. The overall message is clear: advancing housing affordability requires confronting the conditions that create economic precarity and inequality.
What strategies are available to advocates? One critical strategy is to strengthen the position of low-income residents within a housing market. The most effective tool is passing robust tenant protections that shift power to low-income residents in the housing market, including rent stabilization, just cause for eviction, tenant anti-harassment, and right-to-organize policies. These policies have been found to significantly reduce rent gouging, eviction, displacement, and homelessness.
Income-limited affordable housing can be another strategy for creating housing sheltered from rising costs, but only if rent payments can be restructured. The same increase in inequality that is inflating market-rate housing prices also causes restricted affordable housing prices to climb, since these rates are tied to a percentage of median income. Median income may be increasing more slowly than average income, but it is still increasing faster than what low-income families can afford, especially in hot economic markets with growing numbers of high-paying jobs. Actual affordability requires deeper operating subsidy and stronger rent caps within deed-restricted properties and, ultimately, transitioning to a rent structure based on a household’s actual income (such as with vouchers and public housing), rather than area median income.
A second strategic pathway is to implement policies that directly reduce inequality. Santa Fe’s new policy tying minimum wage increases to rising housing costs is an innovative way to ensure wages keep pace with rent increases. To reduce inequality overall, though, increasing wages at the bottom needs to be paired with addressing income concentration at the top. Progressive taxes on income and wealth can both fund public investment in housing (and other social needs) and slow the extreme gains at the top. In other words, progressive taxes are not just a smart way to fund more affordable housing; they can also directly decrease the pressure on housing prices in the market.
Whose Side Are You On?
An inequality-centered framework also clarifies which coalition partners housing affordability advocates should seek out. Tenant organizers, affordable housing developers, and labor unions are confronting the same underlying economic forces and need to stand together against the billionaires and business interests driving inequality.
There are many examples of the effectiveness of community labor coalitions. In Minnesota, the Bargaining for the Common Good coalition has collectively built power to win labor organizing campaigns and advance rent control. In Los Angeles, a broad coalition of community groups and labor unions helped pass two measures in 2022 and 2024 to generate billions of dollars in new funding for affordable housing. To take on the concentration of wealth and power that is driving inequality, these types of coalitions and the political power they amass must become the norm.
Move Beyond the Market
The housing affordability crisis is a predictable outcome of a market operating within extreme inequality. Meeting the human need for housing therefore requires expanding models beyond pure market logic. Social housing—decommodified, permanently and deeply affordable, resident-controlled, and publicly organized—must be a central component of long-term housing affordability strategy. This includes fully funding public housing, community land trusts, limited-equity cooperatives, and other community ownership models.
The community development field has always understood that housing justice cannot be separated from economic justice. The recent wave of deregulation politics has distracted us into debating zoning minutiae while inequality accelerates. Housing affordability is not fundamentally a housing supply problem; it’s an inequality problem. Advocates’ actions should reflect that.
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8 thoughts on “To Solve the Housing Affordability Crisis, Communities Must Confront Inequality”
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Great article! But why doesn’t it go into no-equity housing cooperatives more? The end of the article alludes to “social housing” but I already feel like this is just the next “affordable” housing sometimes. Limited-equity coops don’t really do anything for poor people, no-equity coops are the only real long-term solution. So it was a bit disappointing to not see them mentioned at all, when they exist all over the world (including Canada).
The Bucholz article is flawed in two ways. First, it defines “widespread affordability” as cutting rents in half. That’s a really high bar, and does not exclude the possibility that more housing would lead to more modest reductions in rents. Second, it assumes that housing can never grow by 1.5 percent per year. But this assumption is based on data from 2000-20: a VERY slow period for housing growth due to the 2008 recession.
The broader claim that “inequality is the problem” overlooks the fact that in the pre-New Deal USA, when inequality was as great as it is today, housing costs were stable. (see https://www.stern.nyu.edu/sites/default/files/assets/documents/NPLH_AER%20(2).pdf )
To me, “economic justice” is an open-ended concept, just as “inequality” is. In my CED experience, I have never found housing advocates interested in economic policy formation, much less its impacts or outcomes. All they seek is greater “affordable” housing supply & subsidies from a political advocacy standpoint, rather than from an economic market and public policy context. Why don’t we define our terms and encourage housing advocates to team up with community economic expertise?
No one in community justice advocacy know much about the adopted long-term Vision, Strategic Housing Implementation Plan, or Strategic Economic Development Plan, for example. Folks are uncomfortable with the context of economic concepts, strategies, Goals, Vision; we need to ask: what constitutes a healthy economic marketplace? How is it tied to our labor market and educational system? This, for me, is a very old self-inflicted barrier which will not go away. In short, we need to become astute re: intersectionality dynamics.
Nice to see the ill effects of income inequality on housing affordability being rediscovered. Mark Kelman had an article on “The social costs of inequality” making this point in Dissent all the way back in the summer 1973 issue!
The claim that pre-New Deal housing price stability refutes the effect of income inequality on housing affordability is not convincing. For thirty years after World War II the United States (and many other developed nations) had a period of unusually reduced income and wealth inequality, with major gains in working class incomes and major improvements in the quality and affordability of housing for the majority of the population. As income and wealth inequality have increased, housing costs have also increased. In other words, returning to Gilded Age levels of inequality is at least partially responsible for rising housing costs. The paper cited, on Global House Prices, 1870 – 2012, argues that rising land values are behind both rising housing prices and rising wealth inequality. The question of why land values are rising remains open.
Does anyone else find this debate a tiresome distraction? Does anyone who knows anything about housing really think there is any single cause or solution?
Aside from the libertarian wing of YIMBYs, most on the pro-housing “side” do not think deregulation alone is enough. And tenant advocates are not really against building more housing. As this paper notes zoning reform is necessary, just not sufficient. Exclusionary zoning is even more of a barrier to Affordable Housing and social housing than it is to market rate apartments.
The ideological battles may give academics something to write about. It may be fun to hurl vindictives back and forth and try to score ideological points. But in real communities and real life its very counterproductive to formulating the strategies that best meet local conditions and organizing broad, winning coalitions .
Re: Barbara Samuels
Yes! I am really only commenting to agree with you and say I am tired of the back and forth between supply side and demand side interventions. It’s going to take a range of solutions including strategies from both “sides” to move forward. Thank you for your comment.
Thanks for kickstarting a thought-provoking conversation Chris! Coincidentally, I’ve been working on an article about some of these stories, and I have a somewhat different read of the Storper paper.
The Washington Post wrote a story covering the article with a good summary:
It explores a hypothetical: Imagine that a city increases its housing stock by 1.5 percent each year — a rate that is more than twice the growth of New York or San Francisco from 2000 to 2020, though lower than Denver, Phoenix or Houston.
If all that new housing caused prices to fall by 4 percent a year, it would take 18 years before a median one-bedroom apartment becomes affordable for a worker without a college education in San Francisco, or 11 years in the District or eight years in Boston, the paper says.
The paper makes some strange assumptions, which I’ll get to shortly, but just at face value: That is a finding that supply matters A LOT! If a 1.5% increase in housing stock causes a 4% decline in rent, then that’s dramatically better than the baseline 4% appreciation these high-demand cities have seen for 20+ years. Two other observations:
1. Storper and co are almost certainly underestimating the potential impact of supply because:
They assume the highest-demand metro cities in the world cannot possibly grow their housing stock more than 1.5%/year, even though Southern metros like Austin, Atlanta, and Durham, NC have done so for years. Southern metros have a sprawl problem, but they also build more infill market-rate housing than any of the high-price coastal metros. San Francisco, DC, Boston, New York City—these cities are making progress, but they remain plagued by massive supply constraints which lead to low rates of building. As a result, they remain far less affordable than the Southern metros even as their populations have stagnated and the Southern cities boom.
2. “Affordable for a worker without a college education” in the paper is assumed to mean affordable to a single-earner household earning 30% of the median income of an American worker without a college degree. Their definition of basic affordability targets the bottom 20% of American earners—a group that most housing advocates agree will likely need subsidy to afford reasonable quality housing. And even then, the authors still find a relatively low growth rate of supply can eventually meet the needs of such low-wage earners. That’s a shocking finding the author’s don’t even acknowledge.
According to the paper’s own logic, the counterfactual to building more housing—i.e. lower rates of supply growth—is greater rates of rent inflation.
To wrap up the study, its authors conclude that supply from the private market will never meet housing needs; we just need the government to build housing and subsidize rents. They call “deregulation” a “harmful distraction” from public subsidy like housing vouchers, but these things are not mutually exclusive. All the zoning and permitting reforms and cost reduction measures championed by YIMBYs are also prerequisites for the gov effectively building housing at scale, and they can complement subsidy programs by generating more property tax revenue to fund them. I see building housing as a complement to the work of tenant activists and others to provide transfers that help low-income tenants have maximum freedom of choice to stay housed in their communities or move toward opportunity, both important