Rescue Missions & the Housing Affordability Crisis
The $10 Trillion Invisible Wall: How We Broke American Housing and Rescue Missions Can Help Fix It
Why read this article?
Rescue missions could greatly benefit from a significant legislative movement emerging called the YIGBY (Yes in God’s Backyard) movement to complement the YIMBY movement addressing the housing affordability crisis.
The housing affordability crisis is likely to be one of the defining causes for younger generations, and it will be central for rescue missions to lead in addressing this crisis.
Rescue mission leaders could benefit from understanding the systemic structural reasons for the housing affordability crisis in developing their partnership strategies.
It's important to understand the nuance of how housing costs and other factors drive homelessness to adapt strategies
Don’t have time to read this? Listen to the podcast for this report.
At City Vision University, we have hundreds of individual meetings with missions each year where we learn about the challenges they are facing. One of the most significant things we’ve observed from these conversations is that there is a world of difference between the challenges that are being faced by missions in lower cost of living areas vs. high cost of living areas. This seems to have translated into major differences in the demographics and drivers of homelessness across cities and regions.
Because of that, we decided to focus a major research effort in understanding the crisis that touches millions of lives across the United States: housing affordability.
There is a chasm in housing costs across the country. In San Francisco, the average home price hovers around a staggering $1.5 million. In Cleveland, Ohio, that number is closer to $115,000. This isn't just a statistical difference; it’s a different economic reality entirely. This disparity is a direct symptom of a crisis that has been decades in the making: a "perfect storm" of economic transformation and deliberate policy choices, with profound social consequences.
Cities are Both a Blessing and a Curse
Cities are both one of the greatest blessings from God, but they also bring their share of problems. People move to cities because of the jobs and productivity benefits they bring, but all of those people moving to cities creates a range of problems.
The book Abundance, by Derek Thompson and Ezra Klein, offers one of the best explanations of how we got to the current housing affordability crisis. The book explains that this crisis didn't happen by accident. It was built. In the post-World War II boom, developers in places like Lakewood, California, erected thousands of homes in just a few years—a new house rolling off the assembly line, metaphorically speaking, every seven and a half minutes. Compare that incredible pace to the sluggish rate of construction in many of our most prosperous cities today, and it becomes clear that something fundamental has shifted.
The intense demand to live and work in high-productivity hubs like San Francisco crashes directly into a critical failure on the supply side. When the number of homes doesn't keep pace with the number of jobs and people, prices inevitably skyrocket. The median home prices tell the story: $1.1 million in Manhattan, $1.3 million in San Francisco, $1 million in Los Angeles, compared to $115,000 in Cleveland. The houses that were needed were often never built.
Historically, we built far more, but something changed. The 1940s saw the "greatest numerical growth on record," with 8.5 million new housing units added. But starting in the 1970s, construction began to lag population growth. After the Great Recession, home building was "obliterated" and has never fully recovered. Internationally, the U.S. falls behind, with about 425 dwelling units per 1,000 people, well below the OECD average of 470 and far behind countries like France and Italy (nearly 600).
This shortage has profound consequences. Nearly 30% of American adults are now "house poor," spending 30% or more of their income on housing. This isn’t just a personal strain; it’s an drag on the economy. It forces people into soul-crushing commutes or pushes them into jobs for which they are overqualified, simply because they can't afford to live where the better opportunities are.
The core of the problem is a simple but devastating equation: from 2000 to the early 2020s, median housing prices roughly tripled while median income only doubled. Housing costs rose 50% faster than wages. This has pushed a staggering number of Americans to the brink. Nearly 45% of all renters are now cost-burdened (spending >30% of income on rent), and almost a quarter are severely cost-burdened (spending >50%). For the poorest households, the situation is a catastrophe: 75% are cost-burdened. Nationally, there is a shortage of 7.1 million affordable rental homes for this group alone. This burden falls disproportionately on minorities, with nearly 60% of Black renters being cost-burdened, reflecting deep, systemic inequities.
The macroeconomic toll of this failure is difficult to comprehend. Research by economists Chang-Tai Hsieh and Enrico Moretti estimates that restrictive housing constraints in our most productive cities have slashed U.S. economic growth by as much as 36% over several decades. This amounts to a mind-boggling $10.8 trillion in lost GDP. To put that in perspective, the entire U.S. federal budget for a recent year was about $6.9 trillion. The economic drag from our failure to build enough housing is larger than the annual spending of the entire federal government.
High housing costs are also a primary driver of inflation. Housing is the single largest component of the Consumer Price Index (CPI), currently making up about 36% of the basket of goods. When housing costs soar, it pulls the entire economy's inflation rate up with it, affecting everyone.
The Rules of Exclusion: How Zoning Built the Crisis
This crisis is not an accident of market forces. It is the direct result of deliberate policy choices. Much of the book Abundance involves the authors, who are on the political left, pointing out the hypocrisy of the stated values of liberals and how they actually play out. They point out that the same people with the “In this house we believe…” yard signs are often the most vocal NIMBY activists driving up housing costs (see image below).
The foundational policy tool is zoning. Invented in the early 20th century, zoning was initially seen as "good housekeeping" - a way to manage the new conflicts arising from technologies like trucks and buses that allowed industry to encroach on residential areas. It was meant to organize the city, not necessarily to stop it from growing.
But over time, zoning evolved into a powerful tool of exclusion. In the 1970s, cities like Petaluma, California, pioneered a new model, establishing strict annual caps on new housing and creating "urban growth boundaries." This anti-growth model spread like wildfire. California, which routinely built over 200,000 homes a year in the 1950s and 60s, hasn’t permitted more than 150,000 in any year since 2007. Los Angeles permitted fewer homes in the 1990s than it did in the 1980s, which was less than the 1970s, even as its population grew.
It’s crucial to understand the racist roots of this exclusion. When the Supreme Court struck down explicit racial zoning laws in 1917, cities and real estate interests pivoted to other tools. Racially restrictive covenants—private agreements embedded in property deeds not to sell or rent to minorities—became widespread, often promoted by the National Association of Real Estate Boards. The federal government itself institutionalized segregation through the Federal Housing Administration's practice of "redlining," which systematically starved minority neighborhoods of investment by deeming them "hazardous" for mortgage lending. The FHA's own 1938 underwriting manual explicitly warned against the "infiltration of inharmonious racial groups."
The Fair Housing Act of 1968 was a landmark step, outlawing overt discrimination. However, it could not fully dismantle the de facto exclusion that continues through seemingly neutral modern zoning laws. These are the new tools of exclusion:
Single-Family Exclusive Zoning: This makes it illegal to build anything other than a detached single-family house on a lot. It covers up to 75% of residential land in many American cities, effectively banning more affordable "missing middle" housing like duplexes, townhouses, and small apartment buildings.
Minimum Lot Sizes and Square Footage Requirements: These rules mandate large lots and large houses, artificially inflating the cost of each home.
Excessive Parking Requirements: Mandating multiple off-street parking spaces per unit adds tremendous cost—as much as $50,000 per space—and consumes valuable land that could be used for housing.
By mandating that only expensive housing can be built, these rules effectively exclude lower- and middle-income households. And due to the persistent racial wealth gap—a direct legacy of past discrimination—this economic exclusion disproportionately impacts minority communities. Studies from the Urban Institute and Brookings confirm a direct correlation: less housing diversity means less racial diversity.
NIMBYism: The Political Wall Against Housing
If zoning provides the legal framework for exclusion, NIMBYism ("Not In My Backyard") provides the political muscle to defend it. This localized opposition to new development is typically driven by existing homeowners who mobilize to protect their perceived property values and "neighborhood character."
NIMBY groups are often highly organized and influential in local politics. Their tactics include packing public hearings, lobbying officials, and weaponizing legal challenges. Environmental review laws like the California Environmental Quality Act (CEQA), while well-intentioned, are frequently exploited to tie up projects for years over sometimes frivolous objections like shadows or aesthetics, adding immense cost and uncertainty.
This opposition directly exacerbates the supply shortage. It makes development, especially for affordable housing with thin profit margins, a financially risky and unattractive proposition. It creates a self-perpetuating cycle: successful opposition restricts supply, which drives up the value of existing homes, which in turn reinforces homeowners' fears about any new development, fueling future opposition. Housing becomes less a fundamental human need and more a speculative financial asset to be defended at all costs.
The $10.8 Trillion Invisible Wall
After the civil rights movement, it became both illegal and unfashionable to have barriers to housing based on race. It seems that in many ways we have replaced racial barriers to housing with those based on economics and social class. The combination of zoning laws and NIMBYism acts as an “invisible wall” serving like a force field repelling the “undesirables.” In some cases, housing is so unaffordable that this invisible barrier applies to entire metropolitan areas and even whole states (like California).
It would be one thing if this was just the natural consequences of market forces, but this is entirely from the unnatural consequences of a distorted market from unreasonable zoning and NIMBYism. The market for housing is so distorted that the economic drag on the economy is estimated to be $10.8 trillion dollars.
There has been much controversy over President Trump’s proposal to build a wall across the US-Mexico border and what a waste of federal spending that would be. Current estimates for building a wall range from $12 billion to $70 billion (one-time capital cost), but this pales in comparison to the $10.8 trillion dollar annual cost to the economy of current policies restricting housing development.
The Human Toll: How Unaffordability Drives Homelessness
The most visible and devastating consequence of this crisis is homelessness. The connection is direct and causal. As one source powerfully puts it, think of housing as a game of musical chairs. Individual vulnerabilities—poverty, addiction, mental illness, job loss—determine who is most likely to be left without a chair when the music stops. But the fundamental problem is the shortage of chairs. The lack of affordable housing is increasingly becoming a major driver of the rate of homelessness.
However, the nature of the problem looks different depending on the city.
In high-cost "superstar" cities like San Francisco, Los Angeles, and New York, the driver is structural unaffordability. Their successful innovation economies create immense demand, but severe supply constraints have priced out not just the poor, but increasingly the middle class. The sheer cost of shelter is the primary barrier. This is why these cities see disproportionately high rates of homelessness among racial minorities and, especially in California, shockingly high rates of unsheltered homelessness. In Los Angeles County, Black residents make up just 8% of the population but 31% of those experiencing homelessness.
In more affordable cities like Detroit, Pittsburgh, and Cleveland, the problem is one of relative unaffordability. The primary driver is a critical mismatch between stagnant low-end wages and even seemingly lower housing costs. In Pennsylvania, a minimum-wage worker would need to work 89 hours a week to afford a modest two-bedroom apartment. Here, the crisis is rooted more in economic precarity and a frayed social safety net. It is a national failure that only one in four households eligible for federal housing assistance actually receives it due to chronic underfunding.
In both types of cities, the trauma of homelessness exacerbates existing physical and mental health challenges. But the research is clear: these issues are not the primary cause of the overall rate of homelessness; the economic reality of housing costs is.
Is Homelessness Caused by Unaffordable Housing, Bad Decisions or Bad Luck? Yes
When we talk with most rescue missions, they seem to indicate that the primary drivers of homelessness are addiction, poor decisions and mental health. We have noticed a significant difference between what rescue mission leaders are reporting drives homelessness between the high cost cities and the more affordable cities and regions.
While in the more affordable locations, missions report that the vast majority of drivers of homelessness are addiction, poor decisions and mental health, in the high-cost cities, missions often report a much wider range of causes, especially those related to high cost of living. This seems to be backed up by data both in per capita rates of homelessness as well as reported drivers.
This has caused me to develop what I call the Flood Plain Model of Drivers of Homelessness. When a flood happens, the number of homes that are flooded is a function of the vulnerability to flooding of individual homes and the rising floodwaters. Similarly, the number of people who are homeless in a given region is an interaction between the level of vulnerability to homelessness and the economics of housing as follows:
Vulnerability to Homelessness. Largely driven by causes like addiction, mental health, poor life decisions, lack of a strong spiritual foundation and unfortunate circumstances.
Economics of Housing: Largely driven by cost and availability of affordable housing, availability jobs, education, government programs/subsidies and other environmental factors.
In this model, the high-cost housing regions live in a state of constant flooding, while the water level has risen everywhere. Restrictive zoning and NIMBYism act as a dam that ensures a constant state of flooding so that those who live high on a hill can be sure both that the floodwaters and undesirables will not reach them.
Rescue missions have a call of restoring those houses (lives) after being damaged by floods. I personally believe that should not change because the primary goal or core competency of rescue missions is transforming individual lives rather than political advocacy.
Having said that, it's important to recognize the big picture. While our primary role of missions is to transform individual lives, we also need to connect with a larger system that can help release the pressure from the dam and decrease the constant state of flooding.
Throughout history while rescue missions have focused primarily on transforming individual lives, they have also partnered with others to advocate for more just laws. After founding the first Gospel Rescue Mission, Jerry McAuley also advocated for safe housing.
Yes in God's Backyard: A Movement of Faith and Land
Amid this daunting crisis, a hopeful movement is emerging from an unexpected place. "Yes in God's Backyard" (YIGBY) is a faith-based offshoot of the broader pro-housing "Yes In My Backyard" (YIMBY) movement. Its focus is on leveraging a vast, underutilized asset for the public good: land owned by faith-based organizations (FBOs).
For many FBOs, this work is driven by a deep moral imperative to serve the vulnerable. At the same time, many face their own financial challenges with declining membership and aging, costly buildings. YIGBY presents a powerful opportunity to transform a liability—underused and expensive-to-maintain land—into an asset. By developing affordable housing, they can fulfill their core mission while potentially creating a sustainable income stream to support their ministries.
A wave of legislative reform is helping to make this possible. States are passing laws to cut through restrictive local zoning and grant "by-right" development status for affordable housing on FBO-owned land. This means if a project meets clear, objective criteria, it can bypass the lengthy, uncertain, and often politically toxic local approval process where NIMBY opposition can kill a project.
California's SB4 (2023): Allows by-right development of 100% affordable housing on land owned by religious institutions and nonprofit colleges.
Maryland's HB 538 (2024): Mandates increased density for affordable projects on nonprofit land and prohibits "unreasonable" local requirements, like excessive parking mandates.
Washington, Oregon, and others have passed similar bills offering density bonuses, tax exemptions, and streamlined approvals.
New York has a Faith-Based Affordable Housing Act currently under consideration that could enable tens of thousands of new homes.
These state-level efforts are often met with fierce resistance from local governments defending "home rule," but they represent a crucial shift towards treating the housing crisis as the statewide emergency that it is.
Gospel Rescue Missions Leading in Addressing the Affordable Housing Crisis
Gospel Rescue Missions have been on the front lines of serving the homeless for over 150 years, providing emergency shelter, food, and support. Today, many are embracing the YIGBY model to extend that mission, moving beyond temporary aid to create permanent housing solutions.
Most rescue missions are not typically real estate developers. They face significant hurdles:
Complexity: Navigating the labyrinth of development finance, zoning law, and construction is daunting.
NIMBYism: Even with by-right laws, community opposition can be intense and cause costly delays.
Funding: Securing the significant "pre-development" capital for architectural plans, legal fees, and studies is a major challenge for nonprofits.
Capacity: Most lack the in-house expertise to manage such complex projects.
The key to overcoming these challenges is collaboration. The most successful projects involve partnerships with qualified affordable housing developers, who bring the necessary technical expertise. Nonprofit intermediaries like the Local Initiatives Support Corporation (LISC) and Enterprise Community Partners play a vital role, providing training, technical assistance, and help with securing financing.
Concrete examples show this model in action:
The Rescue Mission Alliance in Central New York operates a variety of housing types, from single-room occupancy (SRO) units to family apartments, all integrated with their core supportive services.
The Tacoma Rescue Mission in Washington operates an apartment building with 41 affordable SRO studios for low-income individuals, with rent set at 30% of a client's income.
McKinney First Baptist Church in Texas partnered with a developer by selling a portion of its land for a large mixed-income project, ensuring that a significant number of units would be deeply affordable.
See a more complete list of similar initiatives here.
What consistently sets these projects apart is the integration of comprehensive, holistic supportive services. They don't just provide a key; they provide trauma-informed case management, access to health care, employment support, and life skills training. This is the unique strength of mission-driven organizations, addressing the whole person to foster long-term stability and recovery.
Building a Better Future: Recommendations for the Front Lines
Based on the successes and failures documented in the research, a clear set of best practices emerges for GRMs and other FBOs looking to tackle the housing crisis.
Start with Strategic Planning: Be clear on the primary mission. Is the goal to generate revenue for existing ministries or to directly operate service-enriched housing? A clear vision is paramount.
Build a Team of Experts: Don't go it alone. Partner with experienced affordable housing developers, leverage nonprofit intermediaries, and consider hiring an owner's representative to protect the organization's interests. You can see some national FBOs in this space here.
Do the Financial Homework: Conduct comprehensive feasibility studies early to understand the full costs, financing options, and long-term sustainability of a project.
Engage the Community Proactively: Build trust and support by engaging neighbors and local leaders early and transparently. Mitigate fear and misinformation by clearly communicating the project's goals and benefits.
Leverage and Advocate for Better Laws: Understand and utilize supportive YIGBY legislation. You can start with this list but also advocate for your own. Join coalitions to advocate for stronger reforms and more dedicated funding for FBO-led projects.
Lean into Your Unique Strength: The most powerful contribution GRMs can make is integrating housing with comprehensive, holistic supportive services. This is what transforms a housing unit into a true home and a platform for a new life.
We believe that the YIGBY movement represents a unique opportunity for rescue missions. Not only could help address the zoning challenges that many missions encounter to new buildings, it also could help solidify missions as a key part of the larger systemic solution to the housing affordability crisis.
See the backup research used in this report. Listen to the full podcast for this article here.