The Financial Class Could Easily Alleviate the Housing Crisis. Why Aren’t They?

The Price Gap Agreement is a new proposal that leverages existing financial instruments to get outpriced buyers into homes. It begs the question: why aren’t we already doing this?

An alley in Seattle is inhabited by people living in RVs. | Image Courtesy of The Seattle Times

America is in the middle of a housing crisis so severe that the ‘American Dream’ is all but out of reach for the overwhelming majority of the working class.

Nearly 60 percent of U.S. households earn $105,000 a year or less. Yet maintaining what has long been considered a middle-class life, owning a home, saving for children’s education, preparing for retirement, maintaining health insurance and taking the occasional vacation, now requires between $150,000 and $220,000 in annual income, depending on where one lives.

Kevin Howard, a commercial banking executive with three decades in finance who now works as a climate consultant, believes the solution may already exist within the financial system itself. 

“The housing affordability crisis is a multi-trillion-dollar problem,” Howard told Hyvemind in a recent interview. “And the capital capable of addressing it already exists.”

His proposal, the Price Gap Agreement (PGA), would use familiar market tools to help middle-class households purchase sustainable homes while opening up the homes they leave behind as quality rental housing for lower-income families.

Because the financial infrastructure is already in place, the proposal could theoretically move quickly—operating within the same markets and instruments that already shape American housing. Which raises an obvious question: if the tools are already there, why hasn’t something like it been attempted?

The Slow Collapse of the American Housing Ladder 

For many Americans, the housing crisis has unfolded less like a sudden shock and more like a slow, grinding realization that the traditional path to stability no longer works.

While politicians increasingly campaign on the language of “affordability,” the term often feels disconnected from lived reality. For much of the public, the problem is simpler: nearly everything in American life costs more, and the people who promise me change virtually always betray me. 

Perhaps in no place is the growing wreckage of American life seen and felt more keenly than in the cost of housing.

‘Housing Affordability’ is commonly measured by whether a household spends more than 30 percent of its income on housing costs. But even that benchmark is increasingly outdated. 

A 2024 Pew Research Center report found that roughly one in five households and nearly half of all renters now exceed that threshold.

But even that measure, however, fails to account for local differences in the cost of living, nor adjusts for the fact that every other area of American life has also dramatically increased in cost. 

For many Americans, the result is a life that never quite gets off the ground. Unexpected expenses can destabilize a household, and younger adults increasingly delay leaving home or starting families because the cost of independence has climbed so steeply.

“In America, where once the working class used to be able to afford to own a home in a major American city, now for the first time in U.S. history the median middle-class household can no longer afford to buy the median home in the average American city,” Howard said. 

The Price Gap Agreement and the Missing Middle of Housing Policy

Homeownership costs have also hit record highs in recent years. The Harvard Joint Center for Housing Studies, reports that the rapid rise in interest rates for 30-year mortgages over the past several years has pushed large numbers of buyers out of the market. 

Families who once might have comfortably entered the housing market now find themselves priced out despite having stable incomes and solid credit.

To put that into perspective, a buyer needs to earn at least $100,000 in 53% of all metro areas to afford the median-priced home. The median household income in 2024 was $83,730. Assuming two earners, that works out to roughly $41,865 per person. 

That reality is what led Kevin Howard to develop the Price Gap Agreement.

“The national residential real estate market is frozen because most people who want to buy a home can't afford it and the people who can afford it won't buy at this price,” Howard said. “The Price Gap Agreement addresses this problem by providing impact investors the opportunity to bridge the affordability gap for credit qualified middle class households.”

The program focuses on families earning 80 to 120 percent of the Area Median Income (AMI), households that historically would have been well-positioned to buy homes but are now increasingly excluded from ownership.

Many face what Howard describes as a qualification gap. A family might qualify for a $300,000 mortgage while homes in their market start closer to $400,000. That difference—often around $100,000—is simply too large for most households to bridge.

Howard argues that existing programs fail because they replicate the broader exploitative economic model: provide poor quality to people who can't afford to pay market price. 

The best example is the much-lauded land trust model that makes home ownership possible by excluding the land and capping what the homeowner can sell the house for. 

“Homeownership is the primary way Americans have historically built personal wealth, but this is exactly what the land trust model denies lower-income households,” Howard said. 

How Does the Price Gap Agreement Work?

Howard’s proposal draws from the Sustainable Debt Fund where impact investors fund projects that produce environmental or social benefits alongside financial returns. These are investors who are willing to accept a lower than market return on their investment in order to achieve a sustainability or social justice goal. 

The model also uses the Home Equity Agreement, a financial instrument legal in 32 states and widely used in housing finance. In recent years the structure has often been deployed by private equity firms to capture homeowner equity. The Price Gap Agreement proposes using that same mechanism to help households build wealth instead.

Under the plan, impact investors help cover the gap between what qualified buyers can afford and the price of the home they want to purchase. In return, investors receive a modest annual return while helping finance energy upgrades that reduce long-term costs for homeowners.

The buyer receives an affordable, green certified home that empowers them to build generational wealth. Investors can then recycle their capital into new housing purchases, allowing the program to expand over time.

Critically, the system is designed to operate largely within the housing market itself.

The proposal includes a rent subsidy program that would not rely on taxpayer funding. Instead, the rent subsidy program will be financed by a 3% participation fee attached to each transaction, shared between the buyer, seller and participating real estate agents.

Those funds would flow into a rent subsidy pool that helps lower-income households afford the homes vacated by buyers entering the program. Participating renters would pay no more than 30 percent of their income toward housing.

Administration would be minimal. A participating city would need only a small staff presence to oversee the program and distribute rent subsidies.

“PGA requires no public funds, no city credit enhancements and no guarantees,” Howard said. “All the city needs is a small administrative presence to manage the program and ensure the rent fund is distributed properly.”

In other words, the system is designed to operate largely within the housing market itself. Each successful home purchase helps create room for another household further down the income ladder.

Using the City of Seattle as a pilot model, Howard estimates that a $2.7 billion Sustainable/Social Bond could help about 9,500 middle-class households purchase homes while opening affordable rental housing for another 9,500 lower-income households. 

Once the concept is established in Seattle, the PGA could be scaled throughout Washington state to roughly 43,000 middle class households through a $8 billion-dollar dual Sustainability/Social Bond via the Sustainable Debt Market.

That’s pennies compared to billionaires like Jeff Bezos or Elon Musk’s wealth alone. We have to collectively ask ourselves: how better to spend America’s wealth than to get regular American families into safety and stability?

Working Within the System That Created the Crisis

Of course, there are many issues with using the financial sector to attempt to resolve the housing crisis. Housing should, of course, be a right.

The financial sector’s involvement in what ought to be basic sources of human material security, from housing to food to water, is itself the cause of the crisis.

But what the PGA presents is an opportunity to say that the housing crisis could be significantly alleviated even by the rules of that very financial system with relatively minor redistribution.

If the American Dream has historically meant anything meaningful materially speaking, it has meant home ownership. It is the vehicle by which ordinary people could build wealth in a way that had little historical precedent. 

To remove the promise of attainable home ownership is the cornerstone of tech oligarchs’ dream to ensure you “own nothing,” because if you own nothing, your ability to organize and build political power is wildly, wildly diminished. Without wealth, the American working class finds itself unable to build a foothold with which to create the time, space, and liberty to organize politically.

Dragged along by an insane, totalitarian work culture, overwhelming bills, and healthcare (literally the ‘right to live’) tied to ruthless workplace exploitation, Americans today are too often tired, disoriented, depressed, and spiritually deflated, pumped full of chemicals just to keep working. That’s by design.

Which is why one of the only notable responses to this crisis has been Trump’s 50-year mortgage, a deeply unserious, deeply cynical, predatory proposal. Worse than nothing, the 50-year mortgage is a middle finger and the perfect policy symbol for a ruling class that appears to have active disdain for regular Americans.

The PGA is a way to achieve relief for American families now, today, before any hoped-for revolution or prospective collapse. It’s an opportunity for politicians to present solutions without also being forced to propose significant tax adjustments. It’s efficient, the alleged goal of every financial talking head.

Looking to the future, Howard believes his home state of Washington could provide a natural place to test the idea. 

Seattle’s new mayor, Katie Wilson, a progressive challenger whose upset victory carried echoes of Mamdani’s breakthrough in New York, campaigned on affordability and social justice.

A pilot program like the Price Gap Agreement would align closely with those priorities and could offer the city a practical way to begin addressing its housing pressures.

Even a fraction of the capital already circulating through financial markets could move thousands of families into stable housing. The possibility is there.

The question is whether the institutions that control that wealth are willing to see housing as something worth investing in for the public good.