The Housing Affordability Crisis Is Hurting the Quality of Our Properties

• The cost of unaffordability: The affordability crisis is pushing homeowners to defer maintenance and quietly erode long-term property values.

• $1 land: Chicago’s Missing Middle Housing Initiative is converting vacant city lots into medium-density housing.

• Landlord Inc.: Trump’s proposed investor ban is rattling housing markets without fixing what’s actually driving home prices.

• Dallas do-over: A 1970s Dallas office icon is being reborn as a stacked, transit-linked vertical neighborhood.

Perspectives

The Housing Affordability Crisis Is Hurting the Quality of Our Properties

The housing affordability crisis is no longer just about who can buy a home. It is quietly becoming a problem about what happens to the homes we already have. November’s data out of Austin shows prices barely budging, down just 1%, even as costs remain roughly 54% higher than in 2020. That kind of pressure leaves homeowners and renters stretched thin, forcing difficult trade-offs that don’t always show up in monthly housing statistics. One of the least discussed consequences is how affordability strain pushes routine maintenance and upkeep to the bottom of the list, slowly degrading the quality and long-term value of the U.S. housing stock.

Austin illustrates how deep-rooted the issue has become. Despite leading the nation in new home construction in 2024, affordability has barely improved, with roughly a third of residents still considered cost-burdened. Years of rising prices, fueled by pandemic-era demand, remote work, and cheap debt, have reset housing costs to a higher baseline while expectations for homes have stayed largely the same. Buyers are still chasing move-in-ready properties, even as their financial flexibility shrinks, creating a growing mismatch between what people can afford and what it actually costs to maintain a home properly.

That mismatch shows up most clearly in deferred maintenance. When budgets tighten, landscaping, pest prevention, structural upkeep, and other “invisible” work gets delayed, only to compound into far more expensive problems later. Buyers overwhelmingly prioritize condition, meaning neglected properties risk longer sale timelines and lower values when it’s time to exit. If affordability doesn’t meaningfully improve in 2026, the lasting impact may not just be higher housing costs, but a generation of homes that emerge from this period in worse shape than when it began.

Overheard

Investors Still Buying a Third of Homes as Policy Spotlight Turns to Bans

Investor appetite for single-family homes remains a defining feature of the 2025 market, with buyers identified as investors—small and large—accounting for roughly a third of all home purchases in the third quarter, the highest share in years. Small landlords dominate that bucket, controlling the bulk of investor-owned stock, while institutional players with portfolios north of 1,000 homes own only a couple of percentage points of the national single-family market. That mix shapes how policy discussions on investor activity translate into real-world housing dynamics.

These numbers come against the backdrop of President Trump's announcement of plans to move toward a ban on large institutional investors purchasing additional single-family homes, saying on social media that he wants to restore homeownership to ordinary families rather than corporations. The proposal is aimed at narrowing competition in the entry market for first-time buyers and has attracted both attention and skepticism. Large firms like Blackstone and Invitation Homes saw their stock prices wobble on the news, reflecting investor concern about what constraints on acquisitions might mean for capital flows into housing.

Even with the large number of investors buying homes, the practical effect on affordability is far from clear. Institutional buyers account for a small slice of the overall housing stock, and even in markets where they are more active, experts note that supply shortages and high construction costs are the main drivers of price escalation. Banning a narrow class of buyers might shift some demand, but without addressing underlying inventory constraints or mortgage rate pressures, its impact on broad affordability is likely limited. The debate highlights how political energy around homeownership often focuses on visible market actors rather than the structural forces that govern prices and availability.

Chicago's Strategy of Turning Vacant Lots into 'Missing Middle' Housing

Chicago’s latest housing initiative is converting long-idle, city-owned vacant lots into medium-scale homes by combining ultra-low land costs with targeted subsidies. Under the Missing Middle Housing Initiative, developers can acquire city lots for $1 and receive up to $150,000 in construction assistance per unit to build duplexes, triplexes and small multi-unit buildings that fill the space between single-family houses and large apartments. The effort is funded through the city’s $1.25 billion housing and economic development bond and responds to an estimated 8,800 vacant lots concentrated on the South and West sides.

The first ground-breaking in North Lawndale represents a tangible start, with a $5.4 million project delivering seven two-flat homes and plans for 115 units marketed to buyers earning up to 140 percent of the area median income. The city positioned the program as a fast-track to repopulate neighborhoods that have seen decades of disinvestment and population loss, seeking both to increase homeownership opportunities and to stitch under-utilized parcels back into the urban fabric. Policies like this reflect broader urban planning discussions around modestly scaled housing as a tool to boost density without drastically altering neighborhood character.

What sets this initiative apart from previous lot sales is how Chicago is packaging land price incentives, construction subsidies and a structured RFP process to attract builders willing to work in communities long overlooked by market-rate development. By selling plots in clusters and subsidizing a range of building types, the city aims to create a spectrum of housing that might be financially unreachable otherwise and shift vacant land from a drag on neighborhood vitality into an asset that supports incremental growth.

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Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

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