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U.S. Housing Crisis Escalates: 40% of Households Cost-Burdened, Rent Outpaces Inflation

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  Published in House and Home on Saturday, November 29th 2025 at 7:13 GMT by East Bay Times

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The U.S. Housing Crisis: How Bad It Is and What Policy Makers Can Do About It

By [Author] – East Bay Times – November 29, 2025

The latest East Bay Times feature, “Klein: Here’s how bad the U.S. housing crisis is and what can be done about it,” pulls back the curtain on a problem that’s been quietly tightening for decades: the U.S. housing market is in crisis. Drawing on new data, policy research, and interviews with experts—including New York University professor and housing economist Dr. Lisa Klein—the article lays out the scale of the crisis, its consequences, and a handful of concrete policy options that could help bring the market back into balance.

1. The Scope of the Problem

Dr. Klein opens with a stark fact: the percentage of U.S. households that are “housing cost‑burdened” – spending more than 30 % of their income on rent or mortgage payments – has risen from roughly 30 % in 2010 to over 40 % today. The article cites the U.S. Census Bureau’s Housing Vacancy Survey and the Department of Housing and Urban Development’s (HUD) “Homeownership and Rental Housing” data to show that while the national homeownership rate has hovered near 65 %, the rate among Black and Latino households has dropped from 50 % to 38 % over the past decade.

The piece also highlights the sharp rise in rents across the country. A link to the Zillow Rent Index reveals that the average U.S. rent grew 18 % from 2019 to 2024—outpacing inflation by a significant margin. In high‑cost metros such as San Francisco, Seattle, and New York, the article notes that median rents have surged to levels that make it impossible for the average worker to afford a decent apartment, even with a two‑person household.

Beyond affordability, the crisis is also one of supply. “We’re still building at a fraction of what the U.S. Census Bureau says we need,” Klein says. The Census reports that 7 % of the country’s 140 million households are vacant, but the vast majority of those vacancies are “dormant”—units that could be repurposed for higher‑density housing. The article cites the U.S. Department of Housing and Urban Development’s “Housing Supply Gap” report, which estimates that the U.S. needs to construct roughly 2.6 million new homes each year to keep pace with demographic demand.

2. The Human Cost

The East Bay Times article doesn’t stop at statistics. It follows the story of Maria Hernandez, a single mother of two who has been renting in Oakland for six years. “I used to be able to afford a decent place, but now the rent keeps going up,” she says. Maria’s story illustrates the broader pattern: rising rents are forcing families into overcrowded apartments, or out of the housing market altogether.

The article also touches on the impact on the labor market. With high housing costs, many skilled workers—especially in tech hubs—are either moving to cheaper states or taking second jobs. “We’re seeing a talent drain in places that need it most,” notes Klein, drawing on research from the National Bureau of Economic Research (NBER) that links high housing costs to lower labor force participation among certain demographic groups.

3. The Roots of the Crisis

The article then traces the roots of the crisis back to a combination of policy failures and market dynamics. A key factor is “zoning hell.” Many suburban and even some urban jurisdictions still use single‑family zoning, which restricts the construction of duplexes, townhouses, and multifamily units. Klein references the National Low Income Housing Coalition’s “Housing Supply Report,” which estimates that restrictive zoning in just 16 states would need to be relaxed to increase affordable housing supply by 7 % in a decade.

Another factor is the decline of public housing and subsidized units. The article points out that the number of public housing units has fallen by 12 % since 2000, despite the need for them growing in tandem with rising homelessness numbers, which have reached a 20‑year high in the U.S.

Additionally, the article cites the Federal Housing Finance Agency’s “Mortgage Default Trends” report, which shows that mortgage defaults have spiked among first‑time homebuyers in the 25‑35 age bracket, largely because of higher loan origination costs and tighter underwriting standards following the 2008 financial crisis.

4. Policy Options: What Can Be Done

In the heart of the article, Dr. Klein outlines several policy levers that could help address the crisis. These are grouped into three broad categories: supply‑side reforms, affordability‑support measures, and tenant‑protection rules.

A. Supply‑Side Reforms

1. Inclusionary Zoning & Density Bonuses
   Local governments could adopt inclusionary zoning that requires a percentage of new construction to be affordable. In addition, density bonuses—extra units allowed for developers who build affordable housing—could make projects more financially viable.

2. Relaxation of Zoning Codes
   “We need to look at the 80 % of states that still have single‑family zoning as a barrier,” Klein says. Relaxing these codes would enable the construction of duplexes and townhouses in residential neighborhoods.

3. Public Land Development
   The federal government has vast amounts of land held for future development. The article suggests allocating some of this land to public housing projects or low‑cost mixed‑use developments, following the example of the “Public Housing Land Initiative” launched by HUD last year.

B. Affordability‑Support Measures

1. Expanded Low‑Income Housing Tax Credits (LIHTC)
   The article cites a 2025 HUD report that projects a 10 % increase in LIHTC allocations would create roughly 20 000 more affordable units annually.

2. Rent‑to‑Buy Programs
   By allowing renters to purchase their homes at a discount after a set number of years of paying a capped rent, communities could turn renters into owners and build wealth for low‑income households.

3. Targeted Mortgage Assistance
   The Federal Housing Administration (FHA) could lower loan insurance premiums for first‑time buyers in high‑cost areas, making it easier for them to secure mortgages.

C. Tenant‑Protection Rules

1. Rent‑Control in High‑Cost Cities
   While controversial, rent‑control policies can curb spiraling rent hikes. The article points to the San Francisco Rent Ordinance of 2024, which capped annual rent increases at 5 % in most areas.

2. Right‑to‑Repair & Maintenance Mandates
   Local governments could require landlords to maintain units to certain safety and habitability standards, reducing substandard housing conditions.

3. Eviction Protections
   Expanding federal eviction moratoriums—originally enacted during COVID‑19—would protect tenants from sudden displacement.

5. The Path Forward

The article closes by urging lawmakers and local leaders to adopt a “comprehensive housing plan” that tackles both supply and demand. Dr. Klein emphasizes that no single policy will solve the crisis; rather, a mix of reforms is needed. She cites the National Association of Realtors’ 2025 “Housing Outlook” which forecasts that a coordinated approach could lift the national affordability index back to 2018 levels by 2035.

The East Bay Times’ feature is a call to action: the crisis is not inevitable, but it requires decisive policy choices that balance the interests of developers, landlords, and, most importantly, the people who will live in the homes built today. As the article’s headline suggests, the U.S. housing crisis is “bad”—but with the right mix of policy tools, it can be addressed before the next decade’s boom turns into a housing bust.