Families across the U.S. face an increasingly unaffordable housing market.

• As of 2024, an estimated deficit of 3.7 million homes is driving up costs in almost every state, including Illinois.
• More than half of all renters spend more than 30% of their income on housing costs. Over 12 million pay more than 50% of their income toward these expenses.

Why it's important: The rising cost to rent or own a home undercuts neighborhood stability, local economic vitality and overall economic growth.

What's missing: The "missing middle" refers to a range of moderate-cost housing types. Think: duplexes, townhomes, single-family "starter" homes and older private multifamily rental buildings.

• This housing, historically prevalent in urban areas like Chicago, has become less common and underproduced due to restrictive zoning practices and other market dynamics.
• This missing middle housing is also largely unsubsidized. That means if the mainstream real estate and construction industry isn't building it, few public resources are available to fill construction and rehabilitation cost gaps for more mission-focused developers.

Here's what else: Naturally-Occurring Affordable Housing (NOAH) — which refers to existing rental housing in typically older, privately-owned buildings — makes up the majority of affordable housing in the U.S.

• Generally, it's more cost effective to preserve and renovate NOAH than construct new units, but regulatory, financial and market barriers prevent achieving meaningful scale to meet local demand.

Some strategies: Working closely with national and local partners, JPMorganChase has identified several place-based strategies to increase affordable housing supply — all based on business insights, philanthropic investment, and research and policy expertise.

• These insights present an opportunity for public and private sector stakeholders to target the dynamic circumstances underlying the national housing shortage and tailor solutions to local markets — like Chicago.

🏠 Strategy 1: Streamline municipal zoning and land use processes

Zoning regulations that limit density, target and restrict housing types, or add cost prohibitive requirements (see: high parking ratios) limit the ability to deliver the full spectrum of housing options and price points needed for a diverse housing market.

• Removing redundancies and standardizing processes can help municipalities facilitate faster approvals and reduce bureaucratic hurdles, creating a more predictable development process and making investing in housing more attractive for developers.

An example: Chicago is implementing the Cut the Tape initiative, a suite of recommended process improvements aimed at removing barriers, establishing more concurrent review steps, increasing transparency and streamlining application processes.

• The City is also piloting expedited reviews for affordable housing development and expanding reduced parking minimums across Chicago, already established in areas near public transit.

JPMorganChase has supported the implementation of these reforms by supporting the Metropolitan Planning Council and the Civic Consulting Alliance — both of which provide consultative strategic support to Chicago departments.

🏠 Strategy 2: Facilitate effective property acquisition strategies

Acquiring land suitable for development can be challenging, time-intensive and costly.

• Municipalities have several levers at their disposal to ensure land acquisition strategies are efficiently tailored to meet local housing market needs.

An example: The City of Chicago has prioritized developing a comprehensive strategy around its landholdings.

• One of the most visible manifestations of underinvestment in Chicago's South and West sides is property and land vacancy.
• Efforts to redevelop these lots in targeted neighborhoods will create equity for homebuyers, allow for upward housing mobility for residents, and stabilize and increase the value of surrounding homes and properties.

United Power's Reclaiming Chicago targets city blocks to acquire and build homes. The coalition also prepares and connects homebuyers to affordable mortgages and helps them plan for long-term maintenance and repairs.

• The goal: To build 2,000 affordable for-sale homes in Chicago's South and West sides in the next decade.
• JPMorganChase has supported the coalition since 2020, providing over $10 million to help leverage vacant city-owned land to build affordable homes in partnership with local government.

🏠 Strategy 3: Support construction innovations

Housing development construction is a costly and capital-intensive endeavor — even with reduced costs from streamlining bureaucratic development processes and adopting more efficient land acquisition strategies.

• Macroeconomic factors, like supply chain disruptions and rising material and labor costs, further increase the capital required.

An example: Local developers in Chicago are exploring new models to reduce construction time and design costs and scale production for more affordable homes — like modular building.

• With modular building, construction is done offsite and then assembled onsite.
• The results: This method can shorten development timelines and extend the construction season, which is beneficial in areas with colder winters — like Chicago. It can also provide year-round employment for construction workers.

The Connecting Capital and Community (3C) program, supported by JPMorganChase, has formed an alliance of homebuilders using traditional and modular construction to organize over 60 lots under site control and build six new affordable homes so far, with 30 more pending approval.

🏠 Strategy 4: Strengthen local financing and development capacity for production and preservation

Because of the capital-intensive nature of housing development, it's often economically inefficient for a developer to build new or rehabilitate housing at rent or purchase prices affordable for low- and moderate-income households.

• Nonprofit and other mission-driven organizations are an essential part of the housing supply ecosystem because they can effectively assemble public and private sources of capital at scale.
• These organizations rely on a mix of philanthropic investment, public funding and private capital. That means coordinated efforts across the public, private and civic sectors — and aligned financing solutions — are fundamental to constructing affordable housing at scale.

An example: The Preservation Compact within the Community Investment Corporation, a local community development financial intuition (CDFI), has coordinated and co-designed strategies across government, non-profit, real estate, philanthropic and finance to preserve government subsidized housing and NOAH properties.

• Since its inception in 2008, the coalition has preserved the ongoing affordability of 7,000 rental units; raised, supported and helped develop a $48 million loan program and $5 million Chicago CDFI collaborative to redevelop 1,500 units; and more.

The takeaway: JPMorganChase is committed to powering local economies, and affordable and resilient housing markets for low- and moderate-income families in Chicago and cities across the U.S. are essential to drive economic growth and opportunity.

• This will require coordinated action by private business, all levels of government and nonprofit partners to continue building and scaling these promising solutions.

💡Learn more about these strategies, including innovative financing solutions.

📍 Explore more ideas on reimagining the future of American communities.