3 Innovative Solutions to the Affordable Housing Crisis

Half a decade ago, Covid brought the global economy to a near-complete standstill. Now, it finally appears that the height of post-pandemic inflation, which peaked at an annualized rate of 9.1% in June 2022 for U.S. urban consumers—the most since November 1981—is finally within the rearview mirror.¹

According to a recent report by the U.S. Bureau of Labor Statistics (BLS), prices increased a mere 3.0% between January 2024 and January 2025, signaling a potential reversion to the Federal Reserve’s symmetric long-term inflation target of 2%.^2,3

Still, lower inflation doesn’t mean that prices are declining—only that the rate of increase is slowing. In other words, consumer prices have likely risen permanently, an inconvenient truth that is arguably most visible in high-ticket expense categories like housing.

Rents, already up by an average of 33.4% nationwide since the pandemic, continue to rise faster than broader inflation, causing the average residential accommodation to cost nearly $2,000 a month to lease.^2,5,6

This figure is creating cost burdens for many renter households. Research from Harvard’s Joint Center for Housing Studies (JCHS) reveals that 22.6 million or half of all tenant households spent more than 30% of their household income per month on rent in 2023—200,000 more renter households than in 2022, and 2.2 million more than in 2019.⁷

What can be done to tackle housing affordability challenges? While no single solution is a cure-all for the nation’s deep-seated rental crisis, some targeted efforts may help ease cost burdens. In this article, we present three innovative solutions to the United States’ affordable housing crisis.

1. Build attainable workforce housing

One particularly worrying development, according to the JCHS report, is that middle-income households—those earning between $45,000 and $74,999 per year—are experiencing the fastest rise in rental cost burdens out of any income group.⁷

As the study’s authors explain, cost-burdened middle-income households rose by “3.3 percentage points in just one year to 45 percent [of households in that income range, and up] 7.7 percentage points from before the pandemic.”⁷

One straightforward solution could be to build more housing indiscriminately; after all, a study conducted in Germany found that adding “one new housing unit to the stock for every 100 rental housing units offered on the market in a given month reduces rents by 0.4–0.7%.”⁸

But the JCHS data suggests that an optimal supply-side fix for housing affordability must be targeted and intentional. Increasing the supply of attainable workforce housing—communities aimed at moderate-income households earning between 80% and 120% of a market’s area median income, or AMI—could be most effective at reducing cost burdens for the demographic for whom unaffordability is most rapidly becoming a challenge.⁹

Workforce housing has historically been underbuilt in many U.S. metro areas.¹⁰ This means that a focus on “missing middle” attainable housing, rather than government-subsidized affordable housing developments (or, on the other extreme, high-end luxury communities), could offer a targeted, high-impact solution to the current affordable housing crisis.

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2. Develop safe and attractive manufacturing housing communities

Single-family and multifamily dwellings comprise the lion’s share of the country’s housing stock, but that doesn’t mean that alternative forms of housing should be neglected.

Manufactured homes, which make up roughly 6% of all homes in the U.S. and about 11% of new single-family homes under construction, are quickly becoming an attractive competitor to their traditional, stick-built counterparts.^11,12

They’re also more affordable than the latter. Factory-produced and site-assembled manufactured homes cost on average $85 per square foot to build.¹² This makes them roughly one-half the price of traditionally-built single-family homes, which cost on average $165 per square foot to construct.¹²

Cost savings aside, these homes are also faster to construct: manufactured homes can be built in around three to four months, as opposed to an average of 8.6 months for traditional single-family homes and 17.1 months for multifamily communities.¹⁴

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3. Construct thriving build-to-rent communities

A holistic approach to the affordable housing crisis should enlist the help of a multitude of residential housing formats that address the evolving needs of a growing population of tenant households.

Specifically, as the cost of homeownership soars to all-time highs, more would-be homebuyers are staying on as renters. Across the board, just 5.8% of renters are in a position to afford to buy a home,¹⁷ and even those who can skew older. The median age of today’s homebuyer is 38—and the average, 56.¹⁸

Given these figures, it’s easy to see why there’s an ongoing, nationwide uptick in renter enthusiasm for multifamily alternatives like built-to-rent single-family communities: these accommodations allow young families priced out of the housing market the opportunity to experience the space and privacy of single-family living without sacrificing the amenities common to apartment dwelling, such as clubhouses, pools, gyms, and tennis courts.

Developers are beginning to respond to increasing interest in these professionally managed communities, which are purpose-built with tenants in mind. Build-to-rent homes now comprise 10% of the U.S. single-family housing stock, up from 5% just two years ago.¹⁹ As of 2025, there are more than 110,000 single-family build-to-rent units in the pipeline, mostly in Sunbelt cities like Austin, Huntsville, Charlotte, and Orlando.²⁰

The result, in other words, is a best-of-both-worlds arrangement: the perks of a fully detached home without the headaches of homeownership combined with the convenience of a multifamily community without the cramped nature of its close quarters.

Since 2006, DLP Capital has been addressing America’s affordable housing crisis by financing the development and construction of attainable workforce housing, including build-to-rent communities.

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¹Consumer prices up 9.1 percent over the year ended June 2022, largest increase in 40 years. U.S. Bureau of Labor Statistics. July 2022.

²Consumer Price Index—January 2025. U.S. Bureau of Labor Statistics. February 2025.

³Why does the Federal Reserve aim for inflation of 2 percent over the longer run? Board of Governors of the Federal Reserve System. August 2020/

⁴Rent Prices Keep Rising Amid Inflation, Low Inventory. Nerdwallet. February 2025.

⁵Consumer Price Index for All Urban Consumers: Rent of Shelter in U.S. City Average. St. Louis Fed. February 2025.

⁶US rental market. Zillow. February 2025.

⁷Housing Cost Burdens Climb to Record Levels (Again) in 2023. Harvard Joint Center for Housing Studies (JCHS). December 2024.

⁸The Impact of New Housing Supply on the Distribution of Rents. University of Erlangen-Nuremberg. February 2020.

⁹Workforce housing and middle-income housing subsidies: A primer. The Brookings Institution. December 2019.

¹⁰Missing Middle: Workforce and Affordable Housing in the U.S. Association of Foreign Investors in Real Estate (AFIRE). October 2024.

¹¹Manufactured Housing Is a Good Source of Unsubsidized Affordable Housing—Except When It’s Not. Furman Center for Real Estate and Urban Policy. February 2023.

¹²2023 Manufactured Housing Facts. Manufactured Housing Institute. June 2023.

¹³Increasing Affordable Housing Stock Through Modular Building. Center for American Progress. February 2024.

¹⁴Length of Time. U.S. Census Bureau. March 2024.

¹⁵Local Governments in the U.S.: A Breakdown by Number and Type. St. Louis Fed. March 2024.

¹⁶Tool: By-Right Development. National Multifamily Housing Council. February 2025.

¹⁷Good luck trying to buy a house — housing costs are at an all-time high, Harvard says. MarketWatch. June 2024.

¹⁸Homebuyers are now the oldest and wealthiest in history. Fast Company. November 2024.

¹⁹Built-for-Rent Housing Starts Continue to Increase. National Association of Realtors. June 2024.

²⁰Build-to-rent boom: 110,000+ single-family rentals under construction across U.S., with Texas, Arizona, and Florida in the lead. The Olympian. February 2025.

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