I spent last week looking at rental listings across the Midwest. Granite City. Mishawaka. Lincoln, Missouri.
The same pattern showed up everywhere.
Small homes. Older stock. Most needing work. All marketed as “affordable.” We’re calling these properties affordable because we’ve run out of actual affordable options.
The U.S. faces a shortage of 7.2 million affordable and available rental homes for extremely low-income renter households. Only 35 affordable homes exist for every 100 extremely low-income renters nationwide.
No state has an adequate supply.
This is a construction problem dressed up as a market correction.
What “Affordable” Actually Means Now
The Granite City listing at 2428 Sunbury: three bedrooms, one bath, 864 square feet. Newer roof. Large fenced yard. Estimated ARV of $130K+ after “needed TLC.”
Translation: this property needs work before it’s truly livable.
The Mishawaka duplex? $950 a month plus fees and utilities. Centrally located. Main-floor laundry hookup. Basement storage.
For many renters, $950 monthly represents more than 30% of their income. That makes them cost-burdened by federal standards.
22.7 million renter households were cost burdened in 2024. That includes 12.1 million facing severe cost burdens, spending more than 50% of their income on rent.
Up from 20.4 million in 2019.
These listings aren’t affordable. They’re just less expensive than everything else available.
The human cost is stark. Homelessness nationwide rose 33% between January 2020 and January 2024—reaching 771,480 people, the highest level on record. Over 3.5 million households faced eviction risks in 2024, with eviction filings up 12% nationally.
This isn’t a housing shortage. It’s a construction failure.
The Units We Lost
Between 2014 and now, the nation lost 2.5 million homes renting for less than $600 per month.
Between 2013 and 2023, the number of units renting for less than $1,000 per month fell by more than one-third.
Where did they go?
Some were demolished. Some were renovated and moved upmarket. Some were converted to short-term rentals, like the Lake of the Ozarks property in Lincoln, Missouri. Fully renovated. Fully furnished. Two bedrooms. One bath. Lakefront. Shared dock access.
Perfect for AirBnB and VRBO.
Not available for long-term renters who need stable housing.
The construction industry didn’t replace these units. We built luxury apartments. We built mixed-use developments. We built condos.
We didn’t build what people actually need.
Why Construction Costs Are Killing Affordability
Construction costs for affordable multifamily new construction developments have increased 33% since 2019. That’s higher than inflation over those years.
The affordable housing sector saw a 30% cost increase since the pandemic.
What that means:
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Higher material costs make it harder to build at lower price points
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Labor shortages drive up wages, which drives up project costs
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Financing is tighter, so developers need higher returns to justify risk
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Higher returns mean higher rents
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Higher rents mean fewer affordable units
You can’t build affordable housing when construction costs price you out of affordability.
The math doesn’t work.
The Production Gap Nobody’s Talking About
The U.S. housing supply deficit reached 4.03 million homes in 2025.
Even under an optimistic scenario where housing construction increases by 50% above the 2025 pace, it would still take approximately seven years to eliminate the current shortage.
We’re not increasing production.
Multifamily starts are anticipated to fall 5% in 2026 to an annual pace of 392,000 units. The market has slowed due to tighter financing and rising construction costs.
We’re moving toward constrained development.
Closing the housing gap requires multifamily housing production rising from its current level of 350,000 units to at least 500,000 units per year.
And sustaining that elevated level for 8 to 10 years.
We’re going in the opposite direction.
Why We’re Recycling Instead of Building
These Midwest listings reveal how the construction industry approaches affordable housing.
One property is a 3-bedroom, 1-bath brick ranch built in 1960. About 1,026 square feet. Fenced backyard. Attached 1-car garage.
It’s marketed as an investment opportunity. Buy it. Fix it. Flip it or rent it.
The other emphasizes move-in logistics and tenant requirements. First month deal. 13-month lease. Negotiable pets. A warning that any Facebook Marketplace version of the listing is a scam.
Both represent the same problem: we’re relying on older housing stock to fill the affordability gap instead of building new units.
We’re not building new affordable units. We’re recycling old ones.
That strategy has limits.
Why the Industry Is Getting It Wrong
The construction industry treats affordable housing like a niche market when it’s actually the baseline need—what most people require to maintain stable housing.
We’ve structured our industry around higher-margin projects: luxury apartments, custom homes, commercial developments.
The result? We’ve priced ourselves out of the affordability market and left the affordable segment to age in place.
Marketing a 60-year-old brick ranch as affordable housing is admitting defeat. You’re saying we can’t build what people need at prices they can pay.
💡 Reality check: Every “affordable” listing that requires significant TLC is a unit that’s not actually affordable. It’s a project waiting for capital.
The renters who need affordable housing don’t have capital. They have income constraints. They have credit challenges. They have immediate housing needs.
They can’t wait for someone to renovate and flip a property at a higher price.
The Path Forward Isn’t Complicated
There’s no simple solution.
But the direction is clear.
We need to build more units. Specifically, we need to build more affordable units. And we need to do it at a scale that actually addresses the shortage.
We need to:
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Reduce construction costs without sacrificing quality
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Scale modular and prefab construction methods
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Streamline permitting and approval processes
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Incentivize affordable housing development through tax policy
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Create financing structures that work at lower price points
This isn’t revolutionary. We know what works.
We’re just not doing it at scale.
But Some Places Are Getting It Right
Austin, Texas, proved it’s possible. From 2015 to 2024, the city added 120,000 housing units—a 30% increase. They changed zoning regulations to allow large apartment buildings near jobs and transit. They streamlined permitting. They passed a $250 million affordable housing bond.
The result? Rents fell from $1,546 in December 2021 to $1,296 in January 2026. In older buildings that serve lower-income renters, rents dropped 11% in a single year.
Meanwhile, the North Downtown Athens redevelopment in Georgia is replacing aging public housing with modern, energy-efficient mixed-income units. Chicago broke ground on Jigzibik, the city’s first affordable housing project centered on serving Native Americans—45 rental units scheduled for completion in late 2026.
These aren’t miracles. They’re deliberate policy choices backed by construction capacity and political will.
The difference? These communities decided to build what people need instead of managing the decline of what they have.
What This Means for Construction Professionals
You’re reading this because you work in construction. You understand project economics. You know what it takes to deliver a building on time and on budget.
You also know the affordable housing market is broken.
The question is whether you’re going to participate in fixing it.
These listings represent both opportunities and failures. Failures to build enough housing. Failures to maintain existing stock. Failures to create pathways to affordability.
⚠️ The industry needs to decide: Are we going to keep recycling 60-year-old housing stock, or are we going to build the housing people actually need?
Because the mirage only works until people realize there’s no water.
And 22.7 million cost-burdened renters have already figured it out.
The Bottom Line
Affordable rental housing is a mirage because we keep pointing to things that aren’t actually affordable and calling them solutions.
A 60-year-old brick ranch that needs TLC isn’t a solution. It’s a Band-Aid.
A duplex renting for $950 a month plus utilities isn’t affordable for someone making $30,000 a year. It’s a cost burden.
A lakefront property converted to short-term rental isn’t helping the housing crisis. It’s profiting from it.
The construction industry has the skills, knowledge, and capacity to build affordable housing at scale.
We’re just choosing not to.
And every day we delay, the shortage gets worse. The cost burden grows. The mirage becomes harder to maintain.
I don’t have all the answers. But we can’t build our way out of a crisis by pretending old housing stock is new affordable construction.
We need to build. We need to build more. And we need to build for the people who actually need housing.
Everything else is just another listing in Granite City.
