On a pretty regular basis, someone makes the following statement to me: “We have a housing crisis and we definitely need more housing. But it has to be affordable housing.” Some people will also add on something about how letting developers build housing is a “giveaway” to them, as if no one will live in those housing units.

These attitudes breed skepticism — and even hostility — in political leaders and advocacy organizations toward market-rate housing, and drive support for housing policy that focuses either exclusively or largely on publicly subsidized, income-based affordable housing. The problem is that as much as I and others support and work to expand subsidized, income-based affordable housing, we will never — and I truly mean never — produce enough of that housing to satisfy all, or even most, of our housing needs. These subsidized units clearly play a critical role, particularly for our lowest income residents, and we need many more of them. But, absent a housing Marshall Plan by the federal government (not gonna happen in our lifetime), we simply do not and will not have the massive resources we would need to shift to a dominant public-subsidy-based housing approach.

Which means: In addition to expanding the supply of subsidized income-based affordable units, we must increase the overall supply of housing, and that means — you guessed it — market-rate housing. Some describe all new market-rate housing as “luxury housing,” because it’s expensive. Well, of course it’s expensive, since for decades we haven’t built enough of it. According to California’s Legislative Analyst, the state needs to produce about 180,000 units of housing a year to keep up with growth. In practice, we produce less than half that number.

And, let’s be real. While the new apartment or condo project down the street is expensive, so is the 75-year-old house or apartment you’re trying to buy or rent. It’s *all* expensive, and that’s not because it’s “luxury.”

It’s because it’s scarce.

The conversation I mentioned above — “yes, we need housing, but it needs to be affordable housing” — needs to be deconstructed. What does “affordable housing” mean? It’s pretty simple: housing built with some sort of public subsidy, which is then price-controlled based on the resident’s income. Also known as “below market rate” units or BMRs, these housing units can be geared toward various income levels, such as people with no income, people with extremely low or very low income, people with low income (in San Francisco, an individual making up to about $40,000 or family of four making up to about $60,000), or in some cases, people with moderate income (in San Francisco, an individual making up to about $90,000 or family of four making up to about $120,000).

That’s the answer, right? Just limit all new housing construction to subsidized, income-based BMRs to ensure everyone has a place to live. That must work, right?

Unfortunately, it’s never worked here and won’t work. Don’t get me wrong — I’m a big supporter of subsidized, income-based housing, particularly for our low-income residents. For people with low incomes, the market is less and less likely to create new housing affordable to them, and just as importantly, less likely to offer existing housing options for rent or sale at levels they can afford.

We are currently moving two significant affordable housing funding bills through the California Legislature, with a focus on low-income people. If they pass (and I’m a co-author of both, so I sure hope they do), these bills will produce billions for affordable housing in the coming years, funding something like 15–20,000 new subsidized housing units. If the federal affordable housing matching tax credit program remains robust, that number could increase to 60–80,000 units. That’s terrific. 60–80,000 low-income individuals or families will get affordable housing.

But, the pent up, current, and future need for low-income housing is and will be significantly greater than 60–80,000 low-income housing units over a period of years and years, and these bills don’t begin to address the middle class, which seldom benefits from housing subsidies.

Let’s look at the numbers.

In San Francisco, over the past 10 years, we have produced 2136 subsidized income-based units for very low income people, 1017 units for low income people, and 1544 units for moderate income people. Putting that in context, San Francisco’s population has grown by about 65,000 in the past decade and by 200,000 since 1980. So, while San Francisco is a leader among cities in building affordable housing, even our comparatively robust production numbers don’t match up with either our need or our growth. For example, a few years ago, when 18 affordable income-based units came online in the Castro, nearly 2,600 people entered the lottery to win one.

Statewide, California has only 664,000 affordable, income-based rental homes for a population of about 40 million, leaving more than 1.54 million of California’s lowest income households without access to affordable housing. Putting that in context, California has grown by 3.1 million people in the past decade and 16 million people since 1980.

These numbers don’t add up, in terms of relying exclusively — or even dominantly — on subsidized income-based housing as our primary approach to solving the housing crisis even for our low income, very low income, and extremely low income residents:

This conclusion is also very true for the middle class, which receives very little benefit from subsidized units and can’t receive much benefit since the amount of funding necessary to subsidize housing for the broad middle class would be absolutely massive. Moreover, creating a large middle class subsidized housing program would inevitably cause the middle class to compete with low income residents for housing subsidies — not a good result.

Meanwhile, housing prices have escalated dramatically. In San Francisco, rental housing prices have more than doubled in the last ten years for the 91% of people who either don’t qualify for, or didn’t win a spot in, the affordable housing lottery — up to $4830 (2015) for an average two-bedroom apartment from $2400 (2007). And only 11% of San Franciscans can afford a median priced house in the city based on their income. In Los Angeles, rents increased by 25% between 2002 and 2012 and have continued to escalate.

We are to the point where 20% of Californians spend a majority of their income on housing, which isn’t surprising given the widening divergence between rents and incomes:

And, California, with 12% of the nation’s population, is home to 30% of people living in over-crowded housing situations:

So, particularly for the middle class but really for everyone, we simply need more housing. Not just more subsidized housing. More housing of every variety.

Our anemic housing production as a state has two main origins: 1) stifling, exclusionary zoning that rejects height, density, and multi-unit buildings, 2) unreasonable housing approval processes that subject even zoning-compliant projects to years of bureaucratic hoops and hearings that increase costs and make projects smaller. This perfect storm of shortsighted policies and lack of political leadership has completely jacked up the cost of housing.

For too long, California has put its head in the sand, pretended that we don’t need much new housing (or that, if we do need it, some other city or town will build it), and largely ignored the needs of the many people who struggle with housing. Call this California’s “housing last” policy — a policy that needs to end. We need reform, and we need it yesterday. There are good proposals pending in the California Legislature to make it easier to create both subsidized income-based affordable housing as well as market-rate housing. I’m the author of one of those proposals, Senate Bill 35, but there are other strong ideas from my colleagues and advocacy organizations.

Just to be crystal clear: Anyone who advocates that we ignore these process and zoning problems and instead focus our housing policy exclusively or dominantly on subsidized, income-based housing is advocating to perpetuate the housing crisis. They’re advocating for housing a small subset of low-income people while leaving everyone else — both low-income people who don’t win a subsidized housing lottery and almost all middle class people — to play a game of musical chairs with a limited housing supply that is the result of our state’s refusal to reform our housing creation process.

And, anyone who perpetuates the myth that building new market-rate housing makes housing more expensive should remember that his or her own home is likely yesterday’s “luxury” market-rate housing. Oh, and that house or apartment was almost certainly built by a developer who (*gasp*) made money by building it. And, now someone gets to live in that home! Imagine the gall!

Who pays the price for our exclusionary housing policies that make it so hard to create housing? Low-income people suffer the most, at least the large majority of low income people who don’t win the lottery for a subsidized unit. Next is the middle class, which has almost a zero percent chance of winning a subsidized unit and which cannot afford to rent or buy due to the lack of enough overall housing. The exact same homes that were once affordable to young families and middle-class workers are now within reach to only our very highest earners. It’s not that all this housing is luxury housing — it’s that we have created a world where it is a luxury to have housing at all, given public policies specifically designed to stifle housing production.

Our housing shortage is extreme and will continue to have profound consequences if we don’t fundamentally change how we understand and address our housing supply. People will continue to get pushed out. Our environment and health will continue to suffer as people are pushed into longer and longer commutes. And, our economy will pay the price. The good news is that unlike a crisis caused by a natural disaster, this crisis is human-made, which means we can fix it by approving policies like SB 35 and making other housing process reforms. (If you agree, please call yours State Senator and Assemblymember and ask him or her to support SB 35 and other smart housing measures.)

Let’s make some change.