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Understand Why There's Not Enough Affordable Housing, With This Real Estate Game

Spoiler: There's only one way to win the game—you need public subsidies to help cover costs.

Understand Why There's Not Enough Affordable Housing, With This Real Estate Game

If you're working at a minimum wage job in the U.S., there's a very good chance you won't be able to find an apartment you can afford, no matter where you live. For every 100 extremely low-income households, there are only 29 affordable, non-slum apartments on the market.

Developers aren't building enough to keep up with demand as the number of low-income households grows. This isn't just because most developers would prefer to reap in profits with luxury apartments that can bring in the highest rents. As a simple new game explains, the math just doesn't work. It's literally unaffordable to build affordable housing.

"I kept getting hearing, 'I can't believe the private market can't solve this problem,'" says Erika Poethig, director of urban policy initiatives at the Urban Institute, which created the new interactive game with the National Housing Conference. She started sketching out the simple math to help explain why the lowest-income housing can't bring in enough rent to even cover the costs of construction and operation, let alone make a profit.

The new game lets anyone—from congressional staffers to housing advocates—play with the numbers, based on data from actual projects in Denver, a market that's representative of many cities. "The motivation behind doing this was to have a way for people to try to solve this problem for themselves, to understand the tradeoffs that are made by developers . . . what's in their control and what's out of their control," she says.

If you adjust a slider to raise the rent too much, you get a warning explaining that your renters may not be able to afford food. Even if you slash every conceivable expense—paying for the cheapest construction, ripping off your architects, not budgeting enough for maintenance—the calculator always reaches the same conclusion. Your project won't cover costs, and you won't be able to get a loan.

There's only one way to win the game: You need public subsidies to help cover costs. Unfortunately, while the number of the lowest-income households has grown, subsidies haven't. Until that changes, there won't be enough affordable housing.

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