Improving Housing Affordability

US households face unprecedented challenges related to the high cost of housing. In this paper, we characterize the affordability crisis, assess the primary drivers of unaffordable housing, and offer potential policy solutions. We argue that several distinct housing-market challenges—including financing gaps, local restrictions that make it difficult and/or costly to build, and a lack of an entitlement program—present distinct challenges to both an adequate and an affordable housing supply. Importantly, though, the impact of these features becomes more dramatic during economic downturns. Our current national housing challenges are a product of longstanding structural challenges that were amplified by an unprecedented lack of building after the 2008 financial crisis. As a result, the policy recommendations sit within a broader series of reforms and policy solutions that ensure that housing supply meets demand, and that affordability is not compromised, during all periods of the economic cycle.