We Want Affordable Housing. We Also Want Prices to Keep Rising: How zoning, scarcity and the ownership divide created the housing trap we cannot escape without confronting it.
The Housing Trap We Built
We say we want affordable housing. But we have built a system in which millions of homeowners depend on housing remaining expensive.
In January 2026, President Donald Trump said something unusually candid about the American housing system: "I don't want to drive housing prices down. I want to drive housing prices up for people that own their homes." Months later, he refused to sign the bipartisan 21st Century ROAD to Housing Act, a broad federal measure intended to increase housing supply and reduce barriers to construction. The legislation nevertheless became law without his signature on July 11.
Trump did not create the central contradiction in American housing policy. He simply stated it more clearly than politicians normally do.
We say that housing has become unaffordable. We say that younger people, working families and first-time buyers need relief. But we also tell existing homeowners that their houses should continue becoming more valuable. Those goals cannot be fully reconciled. A house cannot continually become more valuable to its present owner without also becoming more expensive for its next buyer. What looks like wealth creation from one side of the transaction looks like an increasingly high barrier to entry from the other.
A Home and an Investment Are Not the Same Thing
A home is a place to live. It provides shelter, privacy, stability and a connection to a community. An investment is something we expect to increase in value and make us wealthier. A house can perform both functions. For millions of Americans, homeownership has provided stability, equity and financial security that they might not otherwise have accumulated. The problem begins when we organize an entire housing system around the expectation that homes must not merely retain their value but continually appreciate.
Once we do that, affordability becomes threatening. Building more homes might help future buyers, but existing owners may fear that additional supply will weaken demand for what they already own. A duplex down the street, a small house on a neighboring lot or a townhome development may be discussed not primarily as a place where another person could live, but as a possible threat to property values. Scarcity stops being merely an unfortunate condition. It becomes financially useful.
The people who already own homes then have a direct economic interest in maintaining that scarcity. They are also more likely to be established residents with the time, information and political connections necessary to attend hearings, contact elected officials and object to proposed changes. The housing shortage may be broadly harmful, but it does not harm everyone in the same way. For some people, it has produced enormous gains.
We Are Building Housing—but What Kind?
The standard response to the housing crisis is that we need to build more housing. That is generally true. But the word housing is so broad that it can conceal the real question. A studio apartment and a three-bedroom townhome each count as one housing unit. They do not meet the same human need.
Apartments are housing. They are neither inferior nor illegitimate, and many people actively prefer them. I have lived in apartments and loved them. Families also do not necessarily need detached houses. A well-designed apartment can be an excellent family home if it has enough bedrooms, storage, usable living space and access to outdoor or common areas—and if the residents have enough stability to remain there.
But that is not necessarily what we are building.
Updated Census figures that State Demographer Susan Bower presented at a recent League of Women Voters meeting put Bloomington's total housing stock at 40,313 units. Of those, single-unit structures — a Census category that includes both detached houses and some attached homes, such as townhomes — account for 60.2 percent (24,247 units), while multi-unit structures account for 39.7 percent (16,005 units). That represents a real shift toward multifamily housing since the city's own earlier housing report, which counted 21,307 detached single-family homes at 51 percent of the housing stock and multifamily housing at 32.9 percent. Bower's data also shows that 96 percent of Bloomington's housing units are occupied, and among occupied units, 64 percent are owner-occupied and 36 percent are renter-occupied — nearly 40 percent of all housing units are rental, a share notably higher than the state or national average. Among owner-occupied housing specifically, detached houses remain overwhelmingly dominant: 77 percent of Bloomington's owner-occupied units are detached single-family homes.
Recent development has looked quite different from that existing ownership stock. Bloomington's 2023 report identified 1,631 units that had opened, were under construction or had been approved. The projects listed in that pipeline were apartment developments, including several senior-housing projects. Those apartments are needed, but the pattern raises a question that should be asked every time a city announces that it has added hundreds of new units: Housing for whom?
How many bedrooms do the units contain? Are they suitable for families? Are they rentals or ownership opportunities? What do they cost? Can residents remain there as their households change?
Bloomington's own data illustrates the problem. Of 10,276 rental units in one city dataset, only 510 had three bedrooms. Of those 510, only 85 met the city's standard for "naturally occurring affordable housing." That term means unsubsidized housing with rent low enough to be considered affordable to a household earning no more than 60 percent of the area median income. Only 16.7 percent of the three-bedroom units in the dataset met that standard.
Even the word affordable requires qualification. It does not mean affordable to everyone. A household earning substantially less than 60 percent of the area median income may still be unable to pay that rent. And because these are privately owned, unsubsidized units, the label does not guarantee that the rent will remain affordable.
A city can therefore add a substantial number of units while still leaving families with very few realistic choices. A couple may be able to rent a new one-bedroom apartment. But what happens when they have children, begin working from home, take in an aging parent or simply want enough space to remain in the community for more than a few years? Too often, the choice is between an increasingly expensive existing house and a rental apartment that was not designed for long-term family life.
The Ownership Divide
This leads to what may be the central fact of the system: We preserved the houses most likely to appreciate in value while concentrating much of our new housing in units that their occupants do not own.
Existing homeowners possess an increasingly scarce asset: a house and the land beneath it in an established neighborhood where adding more homes is difficult. Many newer residents are offered a place to live, but not an ownership interest in the property. Their monthly payments provide them with housing, which matters. But those payments also finance an asset belonging to a landlord or investor. Regardless of how many years renters remain, the equity generally accumulates elsewhere. We have therefore divided people not simply into homeowners and renters, but into two different economic positions: people whose housing payments build personal wealth and people whose housing payments build someone else's wealth.
This does not mean that everyone should buy a home. Renting provides flexibility, avoids some maintenance expenses and protects residents from certain financial risks. A healthy housing system requires good rental housing.
But a system dominated by appreciating detached houses on one side and rental apartments on the other creates a stark divide. One group gains wealth as housing becomes more expensive. The other pays increasingly high prices to remain housed while ownership moves further out of reach. Because the appreciating homes remain scarce, the people who already own them also have an incentive to resist the smaller and less expensive ownership alternatives that might allow others to enter the market.
The Missing Space Between a House and an Apartment
We often discuss housing as though there were only two choices: a detached suburban house or an apartment in a large rental building. There is an enormous range between them.
Townhomes, rowhouses, duplexes, triplexes, fourplexes, condominiums, cooperatives and small detached houses can provide more space and stability than many apartments while using considerably less land than conventional detached houses. These forms can also create ownership opportunities. A household that cannot afford a large detached house may be able to afford a modest condominium, one side of a duplex or a small townhome.
Another option is a cottage court: a group of individual detached houses arranged around a shared lawn, garden or courtyard. These are separate houses, not apartments stacked above or beside one another. A cottage court could appeal to older adults, small families and people who want a detached home without maintaining a large private yard. It could provide privacy and permanence while allowing more households to share the same amount of land.
Bloomington has recently expanded its zoning code to recognize cottage courts and other forms of so-called missing-middle housing. That is meaningful progress. It acknowledges that the choice does not have to be limited to a large detached house or a conventional apartment building. The current code, however, requires both cottage-court developments and detached-townhouse developments to contain at least five homes.
Why five?
Five small detached houses can become a recognized housing development. Two, three or four do not qualify. A professional developer may be able to assemble enough land, financing and expertise to construct five homes. An ordinary homeowner with a large lot may have room for one additional small house, or perhaps two, but no desire or capacity to create a five-home development. The five-home requirement therefore opens a new category of housing while excluding the simplest application of the idea.
Who Decides the "Right" Use of a Lot?
Imagine a large Bloomington lot with enough physical room for two modest detached houses. Both homes could comply with the building code. Both could have proper utilities, setbacks, drainage and emergency access. Neither would need to be especially tall or visually imposing. Together, they might contain less living space and occupy less building area than one enormous McMansion that could be constructed on the same property.
Yet two independently owned detached homes may still be prohibited—not because the land cannot support them and not because they would be unsafe, but because the zoning categories do not recognize that arrangement.
Bloomington permits a two-family dwelling in an R-1 district if the property satisfies the applicable size and width requirements. But the units must share at least ten feet of common wall or be stacked one above the other. They cannot simply be two modest detached homes. Separate ownership may be possible after subdivision, but the two units must still be part of the attached or over-under structure that the city recognizes as a two-family dwelling.
Alternatively, two houses may be possible if the property can be divided into two separate, legally compliant lots. But the fact that two houses physically fit does not mean the property can satisfy every requirement for a formal subdivision. The city has therefore made a judgment about the "right" use of land in an R-1 district. The objection is not necessarily practical. It is categorical.
One large and increasingly valuable house is treated as normal. A smaller second home that could provide someone else with an attainable path to ownership is treated as a problem requiring special permission—or prohibited altogether. That is not simply the market operating freely. It is the market operating inside boundaries drawn by public policy.
The Second Home That Is Allowed—but Must Remain Subordinate
Bloomington now permits a homeowner with an existing single-family house in an R-1 or RS-1 district to add an accessory dwelling unit, or ADU. The ADU may be inside the principal house, attached to it or built as a separate structure elsewhere on the lot. That is a genuine improvement. A homeowner could create an apartment above the house for an aging parent or potentially build a small detached home in the yard.
But the permission comes with restrictions. An ADU must contain between 300 and 1,000 square feet and may have no more than two bedrooms. A detached ADU ordinarily requires separate utility service and metering unless city officials grant special permission. Most importantly, the ADU cannot be subdivided or placed under ownership separate from the principal house. The homeowner may therefore create another place for someone to live, but she may not create another independently owned home.
Her mother could live in the detached unit. But her mother could not own it separately. It could not later be sold as an entry-level home to a teacher, a young couple or a retired person who wants something small. The land and both dwellings must remain one property under one ownership. Even the bedroom limit deserves scrutiny. An ADU could contain two bedrooms and perhaps another room described as an office, studio or hobby room. But it may not contain a third bedroom.
Why should the city decide that an otherwise safe 1,000-square-foot home may contain two sleeping rooms but not three? An older resident might want one bedroom for herself, one for a niece or grandchild who visits regularly and a third that could eventually accommodate a caregiver. The structure might safely meet those needs. Yet the zoning code has decided in advance that an accessory home should not.
That is not a fire-code requirement or a plumbing standard. It is a policy judgment about the kind of household that the secondary home is expected to serve.
The ADU rules reveal a broader pattern: we are more willing to allow another person to occupy or rent space on an existing owner's property than to permit the creation of another modest home that a new resident could own. An ADU can provide useful and necessary housing. But it does not necessarily alter the underlying distribution of property ownership. The original homeowner retains a more valuable property containing two dwellings. The additional resident receives a place to live, but not a separate asset.
It Was Never Just About Height
The preference for one household on one lot becomes especially visible when communities debate larger residential projects. A proposed three-story condominium or apartment building may provoke intense opposition over its height, mass, traffic and effect on "neighborhood character." Yet a very large single-family house occupying much of the same land and rising to nearly the same height may pass with some grumbling but nowhere near the same uproar.
That difference suggests that the physical size of the building is not always the decisive issue. One structure contains a single household and preserves the familiar pattern of one house, one lot and one owner. The other allows several households to live on land that might otherwise be reserved for one.
Not every objection to multifamily housing is a pretext. Traffic, drainage, parking, design and construction impacts can all be legitimate concerns, and some projects are genuinely poorly designed or poorly placed. But when a similarly large single-family house produces nothing close to the same reaction, height and scale cannot fully explain the opposition. It was never just about how tall the building would be. It was also about who would live there—and how many of them there would be.
A large house occupied by one affluent household is often understood as an investment, an improvement or simply the owner's right to build. A building of comparable size occupied by several households is more likely to be described as density, disruption or decline. The land has not changed, and the height may barely have changed.
What has changed is the number of people permitted to share that space—and perhaps assumptions about their income, age, family structure or social status.
That is why appeals to "neighborhood character" deserve closer examination. Sometimes the concern is genuinely architectural or environmental. But sometimes the character being protected is a social and economic arrangement in which each large parcel is reserved for one household wealthy enough to purchase it. Zoning then does more than regulate buildings. It determines how many people may gain access to a neighborhood and how much wealth they must possess to enter it.
These Systems Did Not Arise Naturally
Bloomington is not uniquely responsible for this pattern. Many American communities have similar or even more restrictive rules, and Bloomington has begun revising policies that once permitted far fewer housing options. But that does not weaken the argument. It illustrates it.
The housing landscape around us did not emerge naturally from millions of individual choices made in a vacuum. It was shaped by zoning classifications, minimum lot requirements, mortgage and lending practices, tax preferences, infrastructure decisions, public investment and decades of political judgment. Those rules helped determine which homes could be built, where they could be built and who would have the opportunity to own them.
Once established, the system created winners. Existing homeowners accumulated equity, political influence and a strong financial interest in preserving the scarcity that increased the value of their property. Over time, the policies that produced those gains became so familiar that they began to appear inevitable.
One large house on one large lot came to seem natural. Two smaller houses on the same amount of land became an exception requiring special treatment. Five small houses became a development governed by an entirely different category of rules. A renter paying a landlord each month became an ordinary market relationship, while a homeowner receiving hundreds of thousands of dollars in appreciation was treated as having earned that gain—even when much of it resulted from public infrastructure, restricted supply and growing demand for access to the surrounding community.
The distinction matters because what is normal is not necessarily natural. The present system is not simply what happened when government stepped aside and allowed the housing market to operate. It is the result of public and private decisions that elevated some forms of housing, discouraged others and distributed the benefits of rising land values unevenly.
Other Choices Are Possible
One way to see that our housing system is not inevitable is to look at places that have organized housing very differently.
In Vienna, roughly half the population lives in municipal or publicly supported cooperative housing. Singapore’s Housing and Development Board has built more than 1.25 million flats that house close to 80 percent of the country’s resident population. Austria, Denmark and the Netherlands also maintain substantial social-rental sectors. These examples demonstrate that governments can define their responsibility for housing in very different ways. Some construct housing directly. Others support nonprofit developers, cooperative ownership or long-term rental housing that is insulated, at least in part, from market speculation.
None of these systems provides a blueprint that Bloomington could simply adopt. They emerged from histories, political structures and land-use conditions very different from those of an American suburb. They also have shortcomings. Vienna still faces rising costs, and Singapore’s model depends on a degree of state involvement and control that would be difficult to reproduce here. Other countries struggle with shortages, speculation, inequality and waiting lists just as we do.
The point is not that Bloomington should become Vienna or Singapore. It is that our own combination of private rental apartments, scarce owner-occupied houses and rising land values is not the natural or unavoidable form of housing. It is one model, produced by a particular set of political and economic choices. Looking at other systems should not lead us to import them wholesale. It should make us less willing to treat our own rules as fixed. The relevant question is whether some features of our housing system reflect genuine necessity—or merely decisions that have become too familiar to challenge.
Security Without Permanent Scarcity
Existing homeowners have legitimate interests. Many have spent decades paying mortgages and maintaining their properties. Their equity may be their principal source of retirement security. A sudden collapse in housing prices would cause real harm.
But that raises a question we rarely confront: Why have we built a society in which the financial security of one generation depends upon housing becoming steadily less attainable for the next?
We do not have to choose between destroying homeowner wealth and preserving permanent scarcity. But we do have to acknowledge the contradiction before we can address it.
We could permit more townhomes, condominiums, cooperatives and small detached houses. We could allow two modest homes on land capable of safely accommodating them instead of requiring either physical attachment or a five-home development. We could build family-sized apartments as well as studios and one-bedroom units. We could make it easier to create independent ownership rather than limiting second homes to subordinate ADUs that remain legally and economically attached to the original property. We could expand public, nonprofit and cooperative housing that does not depend upon permanent price appreciation to survive.
Donald Trump's statement sounded startling because politicians usually promise both affordable housing and rising home values without explaining how both can continue indefinitely. He said which side he had chosen. The rest of us should at least admit that a choice exists.
High housing prices are not weather. Housing scarcity is not a force of nature. The homes we build, the homes we prohibit, the number of families permitted to occupy a parcel and the people allowed to own those homes are all shaped by policy.
One large house is treated as normal. A smaller second house becomes a problem. A multifamily building of similar height becomes a threat.
Those reactions tell us that the debate is not only about buildings. It is about property, wealth, access and which households we believe have a right to belong.
We built the housing trap. That means we can build something different.
By Karen Lundquist, member of the LWV Bloomington
