Confronting the affordable-housing crisis

In this episode of The McKinsey Podcast, hosts Lucia Rahilly and Roberta Fasaro interview McKinsey partner JP Julien about the affordable housing crisis in the U.S. Julien discusses the massive housing shortage, estimating 8.2 million fewer units than needed in 2023, growing to 9.6 million by 2035, which forces 40 million households to spend over 30% of their income on housing. He highlights the importance of location for economic mobility, the disproportionate impact on Black Americans, and the potential $2 trillion GDP boost and 1.7 million jobs that could be unlocked by addressing the shortfall. Julien identifies the high cost of land and construction, insufficient capital for affordable housing, and lack of income and support for low-income families as key drivers of the crisis. He also explores solutions such as zoning reform, offsite construction, public-private partnerships, and the role of private sector leaders, while addressing misperceptions about affordable housing and the risks of inaction.