Bridging the Gap: Why Clarity on Middle-Income Rental Housing is Key to Solving America’s Housing Crisis
Middle-income renters—those earning too much to qualify for traditional affordable housing but too little to afford market-rate units—face increasing pressure in today’s tight housing market. These households, which make up over 17% of U.S. renters, are often overlooked in housing policy, despite being vital to local economies and communities. Without targeted support, they risk displacement, financial strain, and even professional downgrading to qualify for subsidies.
MBA’s Affordable Rental Housing Advisory Council decided to tackle this issue. The Council recently presented a paper to MBA’s Commercial Board of Governors urging the association to work to support this sector of the rental market. The paper, Affordable Rental Housing: Bridging the Gap for Middle-Income Renters identified the key issue as the lack of a standardized definition of “middle-income housing,” which varies by region and policy framework.
While commonly defined as housing affordable to those earning between 80% and 120% of area median income (AMI), even 150% AMI households may be cost-burdened in high-cost cities. This inconsistency impedes investment, policymaking, and development.
Consistent and clear definitions would enable targeted public-private partnerships (PPPs) that align government incentives with private sector capacity. Effective PPPs—offering property tax breaks, flexible zoning, and innovative financing—have already demonstrated success in cities like Los Angeles, Charlotte, and Seattle. By supporting developers to build for the middle market, these models help reduce competition between income groups and stabilize the broader rental ecosystem.
The paper calls for six key actions:
• defining the middle-income segment,
• setting national qualifying criteria,
• expanding PPPs,
• coordinating with HUD and housing finance agencies,
• utilizing data-driven advocacy, and
• launching education campaigns.
The Council’s next steps are to create a list of existing state and local middle-income programs and provide some case studies of successful programs.
A unified approach to the growing middle-income housing shortage could unlock sustainable investment, ease pressure on low-income housing, and promote economic mobility—ultimately strengthening communities nationwide. Addressing this housing gap isn’t just a policy priority, it’s an economic and social imperative.
“The necessity to create a viable, consistent and nationwide strategy for promoting the development and financing of more housing units for middle-income families is increasing everyday”, says Daron Tubian, Head of Affordable Housing Investments at Barings and 2024 Chair of MBA’s Affordable Rental Housing Advisory Council. “The industry has to take this challenge seriously and it is commendable that the MBA is at the forefront of promoting initiatives and recommendations to help this subsector of housing.”
“I’m particularly proud of how members of MBA’s Council engaged very actively on making sure we thought through the numbers, forecasted trends, and which policies are likely to work,” added Victor Calanog, who was named Chair of the Council in 2025. “Fact-based policy is critical for near-term buy-in and long-term viability.”
Calanog said he looks forward to further contributions on this important topic and other key initiatives.
