Here's what should trouble us about current housing policy: the system is explicitly designed to reward developers who build for profit margins rather than people. And the people who benefit most are those who need help least.
Look at the incentive structure. Across jurisdictions, developers receive tax breaks, zoning variances, and public land deals when they promise mixed-income projects. Sounds good. But then watch what happens. The "affordable" units get built last, reduced in scope, or eliminated entirely when market conditions shift. The developer faces no real penalty because the incentive system treats the promise as optional, the profit as guaranteed.
This isn't accidental policy design. It's the inevitable outcome of letting market actors define what counts as success.
When we subsidize housing development without strict performance requirements, we're not investing in homes for working families. We're investing in developer profit projections. The public absorbs the risk through tax incentives and infrastructure spending. The developer absorbs the reward. When a project underperforms its affordability commitments, who pays the difference? Not the developer. The families still trying to find housing.
The real scandal is how normalized this has become. Policy documents across multiple regions use gentle language about "encouraging" and "incentivizing" developers to include affordable units. But incentives without consequences aren't incentives at all. They're subsidies for people who don't need them.
Consider who actually benefits from this arrangement. Developers accumulate land portfolios at reduced cost. Construction companies secure multi-year contracts. Property investors watch land values climb while someone else handles the public relations around affordability. Meanwhile, working families—teachers, nurses, service workers—are pushed further from city centers or priced out entirely.
The column space devoted to this problem rarely asks the obvious question: Why are we designing policy to reward failure?
Some jurisdictions have experimented with stronger tools. Mandatory inclusionary requirements. Extended affordability covenants. Clawback provisions if developers don't deliver. Public land banking. Social housing models that remove profit incentives entirely. These approaches work differently than subsidy-based models, and that difference matters.
The resistance to stricter requirements reveals something important about whose interests drive policy conversations. Developers lobby against mandatory inclusions. They argue it reduces profitability and slows construction. This argument should make us ask: profitability according to whom? And at whose expense?
Housing isn't a luxury good. It's foundational infrastructure. We wouldn't design water policy to make it profitable for corporations to exclude poor neighborhoods. We shouldn't design housing policy that way either.
The current system creates perverse incentives at every level. Municipal governments compete for development by offering easier terms. Developers pocket the savings. Working families remain priced out. Then politicians point to new units built and call it progress, even when those units are unaffordable to most workers in the community.
This is policy capture disguised as pragmatism.
What would a system look like that actually prioritized outcomes over developer margins? It would tie public investment to enforceable results. It would penalize promises broken. It would measure success by whether teachers can afford to live where they work, not by how many units were permitted.
It would require acknowledging that "market incentives" have consistently failed to deliver what communities actually need.
The families displaced from inadequate housing, the workers commuting two hours to jobs in expensive cities, the next generation locked out of home ownership entirely—these aren't market failures to tolerate. They're policy failures to fix.
And fixing them means stopping the practice of rewarding the people making the most money from housing's scarcity.