Defined in today’s terms, any housing crisis is now the affordable housing crisis. Why? The disconnect between ever rising home and rent prices plus rising interest rates and ever stagnant wages has resulted in more and more people being unable to afford a place to live.

What to do about this affordable housing crisis?

Along with some individual cities and states proposing and executing plans to abate this affordability crisis, Senator Elizabeth Warren of Massachusetts recently introduced federal legislation that would pump $50B/year into affordable home and apartment construction through local housing agencies and non-profit developers.

Where would this $50B/year come from to pay for affordable housing? Warren proposes reinstating the federal estate tax to pre-2009 levels to pay for it.

Pre-2009, federal estate tax exemptions stood at $2M at a rate of 45%. Today, in accordance with the 2017 Tax Reform and Jobs Act, federal estate tax exemptions stand at $11.18M at a rate of 40%. Clearly, there‘s a big difference between $2M and $11.18M.

Mark Zandy of Moody’s Analytics looked into the viability of Warren’s housing affordability proposal. He concluded that using tax monies targeted at pre-2009 federal estate tax levels would generate 3M affordable home and apartment units over 10 years.

Lynn Fisher with the American Enterprise Institute challenges Zandy’s conclusions. She believes the government does not have a good track record of building affordable housing regardless of how much money the government has to spend. To help solve the housing affordability crisis, Fisher believes, “…we need the private sector and home builders to have greater freedom to build within cities and urban communities.”

Warren believes in offering financial incentives to localities in order to help change zoning laws that restrict new affordable housing.

It’s unlikely that Warren’s proposal will move forward any time soon but at least now we know that people involved with all levels of government, housing agencies, foundations, non-profits and private sector housing professionals are actively engaged in creating solutions to today’s affordable housing crisis.