Paul Levy lives in Concord.

Our housing affordability crisis has been getting a lot of deserved attention. I want to take a bit of an unconventional look at it.

We define housing affordability as a household’s capacity to obtain decent housing with 30% or less of its income. Households paying more are called “cost-burdened” and those paying more than 50% are called “severely cost-burdened.” In 2024, the Center for Housing Policy at Harvard stated that about one in three of America’s 130 million households are cost-burdened including 20 million owner-occupied units and 22 million rentals. Renters are particularly strapped: half are cost-burdened and over half of these are severely cost-burdened.

Our traditional efforts to solve this affordability challenge are to increase the supply of affordable housing, reduce component costs of housing (land, materials, labor, interest, utilities, and property taxes), and/or subsidize burdened families. Laudably, many efforts of these types are being made.

One thing we seldom mention is that our current affordability crisis isn’t rare. Today, about 23% of homeowners and 50% of renters are “cost-burdened,” but the American Housing Survey reported these figures as 20% and 40% in 1978, and 25% and 46% in 1999. And, throughout the 20th century, obtaining decent housing has overburdened many households.

We also rarely mention that the 30% rule of affordability is arbitrary and flexible. It was adopted in 1981, replacing a 25% rule that, in turn, had replaced a 20% rule dating from the 1940s. A prior, informal rule pegged affordability at 20% for low-income families and 15% for middle and wealthy families. Had we retained any of these earlier rules, almost all families today would be “cost-burdened.”

So why don’t we instantly create a lot more affordable housing simply by redefining affordability as 35% or 40%? The reason leads us to look at the remaining 70% of a household’s income, what housing experts call “residual income.” It is presumed to be sufficient to cover “the rest of a household’s necessities.” In essence, then, our affordable housing goal is part of an “affordable necessities” goal, that all households will be able to afford all modern necessities.

Why do we care whether housing and other necessities are affordable? I think most of us feel that Americans – most certainly those who work or for good reasons cannot – should enjoy a decent, modern standard of living. In our affluent land, that standard includes a bundle of necessities far beyond food, clothing, and shelter. It also includes decent health care, transportation (normally, a dependable car), education, retirement savings, and essential services such as police, fire, and national defense. Many might include affordable child care and probably such near-necessities as church dues, an emergency fund, a periodic vacation, a computer, birthday gifts for children, a dog, and some other things.

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It’s beyond the scope of this My Turn, but if we looked further, we’d find that this full bundle may cost $80,000 or $100,000 per household. Although this is more than most households have, it isn’t exorbitant in an economy that annually generates $22 trillion in personal income (a per-household average of $170,000) and sits on $150 trillion of personal wealth (a per-household average of $1.2 million).

However, as powerful as our free-market economy is as a wealth/income producer, it is a poor distributor of that income and wealth – if we want most households to enjoy the bundle. To do this, society has to intervene, and often does. It helps many of us, for example, with housing, retirement savings, and education, assistance that occurs in all market democracies.

These insights into affordable housing carry important policy implications. First, public policy should highlight our commitment to the full bundle of affordable necessities as clearly as we do for affordable housing (and should specify the other major items in this bundle).

Second, we should recognize that our broad commitment to the bundle expands our traditional strategies for achieving affordable housing (expanding supply, cutting production and purchase costs, and providing subsidies). If we cut the cost of any non-housing necessity without sacrificing quality, we make housing more affordable. If, for example, we cut the cost of quality health care, or if we shift the bulk of education costs to those who aren’t cost-burdened, we make it more likely that a family can afford good housing on 30% or less of their budget.

Third, this relationship of affordable housing and other necessities should guide advocacy by those with special interests in housing affordability – Concord-area communities, the state, low-income housing advocates, private homebuilders, apartment, and developer associations, and others. Championing policies that make non-housing necessities more affordable will advance their special interest in housing.