What is the affordable housing solution in U.S.?

[Phil C.]

Have heard a lot discussions on the affordability of housing in U.S. They pretty much tells the same story. 

On the supply side, the newly constructed apartment buildings will be built to serve the high end market due to the cost of construction, the desired return of investments, etc. Even class B and class C buildings are currently experiencing renovation to pursue higher rent by the value adding process. 

On the demand side, the median income level does not increase much. And the income gap between rich and poor is getting wider. More people will tend to rent for longer time due to various reasons. 

This trend posed a serious problem for the housing market: who will serve the medium / low level demand  while the supply moves away from them? Will the high end market collapse at some point due to too much supply?

How do you think?

[Aristotle Kumpis]

I don't think there will ever be another phase of overbuidling. Most cities are not able to build fast enough these days, due to very high regulations. I think last year, the US was short 200,000 units. The demand is there. Detroit and Chicago are good examples. You can still by a C+ property for around $70K-$90K and it rents for $1000/month or more. How long will that high rent continue? As long as there is demand for rentals, the rent prices will slowly climb year after year. And we all know that there are plenty of renters out there.