The current housing system in the United States may generate substantial profits, but it is not effective for everyone.

A significant portion of the country’s 45 million renters allocate over one-third of their earnings to landlords. Landlords initiate approximately 3.6 million evictions annually, with 6.7 million individuals residing in substandard housing, negatively impacting people of color. Even homeownership does not guarantee security, as nearly 20 million owners face a similar situation, spending more than 30 percent of their incomes on mortgage payments and other expenses.

The societal implications of a flawed housing system are profound, evident in displaced communities, unfavorable health and education outcomes, and more.

Moreover, the housing system struggles to cope with the challenges posed by climate change. The real estate industry contributes 39 percent of global carbon emissions, with 17 percent stemming from energy-inefficient homes. Retrofitting residential properties is vital but costly. However, when landlords decide to undergo retrofitting, it often results in increased expenses and what is referred to as “green gentrification.” Additionally, American households are indebted by approximately $20.3 billion in utility bills.

A transformative approach is necessary. What is required is a progressive construction agenda that enhances housing availability while prioritizing the welfare of families and communities.

This need led Representatives Alexandria Ocasio-Cortez and Tina Smith to propose the Homes Act, a legislation aiming to establish a “housing development authority” focused on creating permanently affordable social housing through community land trusts, public rental housing, limited-equity cooperatives, and non-profit housing entities. With a revolving loan fund model at a national level, this initiative efficiently utilizes public funds to construct much-needed housing that is appealing, sustainable, and placed strategically to address people’s needs. The Homes Act would create housing opportunities for a broad spectrum of working and middle-class individuals while emphasizing those with the most pressing affordability issues.

Aside from refining the initiative’s structure, we, alongside a group of colleagues, simulated the potential impacts of this proposal. Based on a congressional allocation of $30 billion annually – a figure equivalent to the mortgage interest deduction cost – and a corresponding loan program, it is estimated that the Homes Act could yield up to 1.25 million units of social housing, including 875,000 units for extremely and very low-income households. This initiative could also support 427,000 jobs each year, including 161,000 high-paying union jobs.

Most policymakers concur that increasing home construction is key to addressing the housing crisis, but this view is not shared by renters or homeowners.

A recent poll of swing-state voters revealed minimal support for the housing policy of “increasing supply,” while opposing views advocated for “rent stabilization,” a notion that experts dismiss. Common citizens, particularly those struggling with burdensome housing costs and insecurity, do not believe that constructing new buildings will alleviate housing affordability issues.

These doubts are valid. Historically, U.S. housing policy has been skewed towards benefiting the real estate industry. The 1937 Housing Act illustrated that public housing was reserved only for the lowest-income earners, influenced by the real estate sector’s desire to prevent affordable housing options for the middle class. This influence persists today, as the real estate industry remains one of the most significant contributors to both political parties.

Prior initiatives focused on reducing harm rather than eradicating the root of the problem. The Homes Act changes this by introducing a robust public housing option.

Functioning as both a public developer and bank, it serves as a streamlined source for financing, grants, and technical support to facilitate housing projects. Eliminating intermediaries, often responsible for delays and increased costs in affordable housing ventures, the initiative can build denser housing than the private market and rejuvenate distressed properties in consultation with the communities they serve.

Successful projects nationwide, such as Co-op City in New York, resident-owned manufactured housing communities in Austin, and the Bay Area Community Land Trust, exemplify the effectiveness of such public housing options, inspired by the living conditions of millions globally, including 11 percent of Europeans.

The Homes Act offers a comprehensive solution to the housing supply issue, prioritizing communities. Its objective is to generate adequate housing to enable individuals to reside in their desired locations, luxurious homes, and neighborhoods at affordable prices.

Gianpaolo Baiocchi, Director of New York University’s Gallatin School’s Urban Democracy Lab, and H. Jacob Carlson, Assistant Professor at Kean University, authored the upcoming book “Housing is a Social Good,” published by the University of Chicago Press.