The United States is facing an affordable housing crisis.

Nearly two-thirds of renters nationwide say they can’t afford to buy a home, and saving for that down payment isn’t going to get easier anytime soon: Home prices are rising at twice the rate of wage growth. According to research from the advocacy group Home1, 11 million Americans (roughly the population of New York City and Chicago combined) spend more than half their paycheck on rent. Harvard researchers found that in 2016, nearly half of renters were cost-burdened (defined as spending 30 percent or more of their income on rent), compared with 20 percent in 1960.

The National Low Income Housing Coalition found that a renter working 40 hours a week and earning minimum wage can afford a two-bedroom apartment (i.e., not be cost-burdened) in exactly zero counties nationwide. In other words, it isn’t possible.

Even as the economy continues to grow and the housing market rebounds from the Great Recession, Americans face widening inequality, and, for many, an inability to comfortably pay for housing as wage growth stagnates and housing costs continue to climb.

The simple answer to the rent being “too damn high” is, of course, to build more housing. But the reality is significantly more complicated than simply jump-starting construction. A variety of market forces, policy decisions, and demographic changes have converged to make building affordable housing a difficult, and politically fraught, proposition.

And how did a nation that prides itself on opportunity become one in which a shortage of affordable housing options seems to have no immediate solution and where so many renters and buyers struggle?

Here are the main factors driving up the cost of housing.

Demographic shifts have stymied access to affordable housing

Baby boomers—those aged 55 or older—are living longer and more independently than previous generations. They’re also more likely than previous generations to be divorced and living alone. This means less housing stock has been freed up by elderly people dying or moving into assisted-living facilities. In some cases, boomer homeowners are looking to trade down and compete for entry-level homes with other generations, putting upward pressure on prices on homes in the lowest price tier.

The foreclosure crisis of 2008 hit Generation X hardest, and many in and around middle age had their credit damaged and their savings wiped. But after 10 years of repairing their credit in the rental market, some Gen Xers have been keen to return to homeownership. This has added demand in the housing market from an age group that would historically already own homes. What’s more, the continued presence of Gen Xers in the rental market is driving down rental supply and driving up rents.

Millennials (defined as those born between 1981 and 1996), who grew up in the shadow of the Great Recession, have had a harder time finding jobs and thus often live with their parents for longer. And with millennials born in the 1980s now in their 30s, they are finding competition for entry-level houses from the generations before them—including older people who have already built up equity in existing homes. As with Generation X, these millennials’ continued presence in the rental market is driving up demand—and rental prices.

For millennials in their early 20s looking to move into their first rental after college, the pressure on the rental supply from older generations—and older millennials—is making it harder to find an affordable place, leading to what might be a long-term shift in young people living with family well into their 20s.

Affordable housing policy favors homeowners over renters—and our tax deductions prove it

In 1965, the U.S. Department of Housing and Urban Development (HUD) became a cabinet-level agency. The Johnson administration used the department to implement a vision of America in which federal welfare programs combated poverty and the impacts of racial injustice; enthusiasm among progressive activists abounded.

But the change of vision didn’t carry over to Johnson’s Republican successors. The Nixon administration put a moratorium on the construction of public housing, one that is still in effect to this day; public housing can only be built to replace existing units. Then, the Reagan administration drastically cut HUD’s rental assistance programs, which advocates for affordable housing claim made homelessness a permanent fixture of American life.

While subsequent administrations have swung the agency’s priorities between promoting homeownership programs and assisting poor renters by offering housing subsidies, the federal government consistently subsidizes middle- and upper-middle-class homeowners rather than low-income renters, seniors, and the disabled.

Take, for instance, the mortgage-interest deduction (MID), which was established in 1913, along with the federal income tax, and has survived numerous updates to tax law thanks to the powerful real estate lobby. The MID lets homeowners deduct interest payments on a mortgage from their federal income taxes. The Joint Committee on Taxation predicts that in 2019, the MID will cost the federal government $27.4 billion in lost revenue. The MID largely favors middle-class and wealthy homeowners, and its annual federal expenditure dwarfs what the government pays for rental subsidies and public housing.

Prior to the Trump administration’s tax bill, Rep. Keith Ellison (D-MN) floated legislation to lower the cap on the MID from $1 million to $500,000, and to use the savings to fund affordable housing programs. Trump’s tax bill also lowered the MID cap, but did not appropriate the resulting savings to affordable housing.

Trump’s proposed budgets for each year of his term included dramatic cuts to rental- and project-based assistance programs administered by HUD. But the budget ultimately signed for the first three fiscal years of his term gave HUD a funding boost (the budget for fiscal year 2020 has not been finalized). The threat of cuts to affordable housing programs puts advocates on the defensive. Instead of fighting to expand these programs, advocates have to hold the ground they already have.

The low-income housing tax credit (LIHTC), a public-private partnership program created by the Reagan administration’s 1986 tax law, is the largest source of new affordable housing in the country. However, the Trump administration’s tax bill lowered the value of these tax credits—and thus the number of affordable housing units it creates each year—by lowering the corporate income tax.

The nation also has a long history of redlining, segregation, and racist housing policy that has created incredible gaps in the access people of color have to affordable housing options and homeownership, and this has stifled household wealth creation in those communities. A 2018 Brookings Institution and Gallup study also found that even as black Americans face more hurdles on the road to homeownership, they may consistently find their investments in residential property undervalued:

These findings highlight the consequences of orienting U.S. housing policy to favor homeownership and champion the single-family home as an instrument of wealth creation and family stability. Combined with a history of racist and exclusionary policies, including redlining and housing covenants, this policy choice has created a gap in homeownership between white and black Americans, locking black families out of a significant source of long-term wealth creation.

Rising costs of labor and materials mean affordable housing is expensive to build

Home builders, like any manufacturer, charge a premium on top of the base cost of their labor and of raw materials. The Bureau of Labor Statistics tracks the price of such raw materials with its producer price index, which has risen 20.2 percent since the 2008 financial crisis; while the index has fluctuated some in the last year, it remains at elevated levels.

The price of lumber alone has fluctuated wildly in recent years, at times reaching more than twice the cost of what it was in 2008, according to a monthly lumber price index from Random Lengths. Lumber can represent anywhere from 5 to 10 percent of the cost of building a home, and the rise in lumber prices is in part a result of a decades-long trade dispute between the United States and Canada. A third of the lumber used in residential construction comes from our northern neighbors, and that supply has been devastated by mountain pine beetles, which can kill a tree within 48 hours, and by wildfires. With Trump engaging in a war of words with Canada over trade, there is a looming possibility that prices will continue to climb.

Another factor is the increased price of undeveloped land in and around urban centers, where work is concentrated and demand is high. Many home builders and developers have focused on the high-end (and higher profit margin) luxury housing market, which means home builders are constructing fewer entry-level and starter homes. When such starter homes are built, their prices are ultimately bid up because demand far exceeds supply.

While the rebounding housing market has meant more housing starts and more apartment buildings breaking ground, a persistent labor shortage is driving up costs and cutting into margins for these projects, adding to significant economic pressure for developers to focus on luxury units. These units can turn a higher profit, but are built at the expense of affordable housing, rather than in addition to it.

According to a 2018 survey by the National Association of Home Builders, 84 percent of the organization’s members believe the cost and availability of labor is their biggest issue, even with the industry adding roughly 256,000 new construction jobs over the last year, per the Bureau of Labor Statistics. This leads to competitive bidding for specialists like home framers, electricians, plumbers, masons, carpenters, and HVAC installers.

Construction has always been a boom-and-bust industry, but the sector never fully recovered from the Great Recession. Factors like persistently low unemployment, efforts to ramp up deportations and curtail immigration (immigrants make up 25 percent of the sector’s workforce), and the construction industry’s growth over the last few years have converged to keep contractors and developers from getting ahead of rising demand.

Major natural disasters and storms don’t help, either: Hurricanes Irma and Harvey each created increased regional demand for builders. Earlier this spring, nearly 250,000 construction jobs remained unfilled across the country. According to a BuildZoom analysis, the job market is tightest in high-cost markets, which generally have the greatest need for affordable housing.

In the long term, members of the industry worry about a pipeline problem: The average age of those in the building trades hovers in the mid-40s, and many industry and union leaders are struggling to attract younger workers and potential apprentices to job training programs. Without significant investment in education and workforce training, the labor shortage will continue to be a drain on the housing industry’s growth.

Affordable housing suffers from a national “not in my backyard” problem

Restrictive zoning codes are often an effective tool in the fight against new construction and, frequently, densification, helping to suppress housing supply even as demand rises. Whether by limiting the height of new buildings or deciding that large apartment buildings need a minimum number of parking spots, these restrictions make construction more difficult and more expensive. California cities like Los Angeles and San Francisco are known for impeding new construction through these methods, which has led to the state’s severe housing shortage.

The rapid rise of these types of regulations—and the corresponding “not in my backyard,” or “NIMBY,” sentiments among residents and landowners—has increased property values, added to the cost of housing, and made it harder for workers to chase opportunity by moving into fast-growing areas with high concentrations of open jobs. Though it’s great for current homeowners, who see the value of their houses rise thanks to a lack of supply, such restrictive practices hurt the wider economy. A study published last year by the University of Chicago’s Booth School of Business, for example, estimates that the U.S. economy is 14 percent smaller as a result of constraints on housing development.

A Curbed primer on the affordable housing crisis

Why the shortage of accessible, affordable homes and apartments is a nationwide issue.

Why the rent is too damn high: The affordable housing crisis

Black homeownership rates haven’t changed much in the 50 years since the Fair Housing Act

The rent’s ‘too damn high’ in rural America, too

Housing inequality mirrors income inequality, says study

How a ‘segregation tax’ is costing black American homeowners $156 billion

Why high rents are a health care problem

Why affordable housing is scarce in progressive cities

Why buying a house today is so much harder than in 1950

An Obama administration proposal to cut back on such regulations summarized the situation well:

Too many of the communities with the most dynamic growth have pulled up those ladders behind them — often unintentionally — by creating conditions that make it impossible for families to find affordable housing in the same communities where they can find jobs.

Efforts advanced by pro-development, or YIMBY (“yes in my backyard”), groups to push back against these rules include streamlining permitting processes, eliminating parking requirements (which add to the cost of new construction), encouraging transit-oriented developments, and changing zoning laws to allow for more high-density projects. Inclusionary zoning policies, which require developers to include a certain number of affordable units within a larger market-rate development, have also been enacted in cities like New York.

Ultimately, advocates across the spectrum feel local control only entrenches established power, and that state and federal governments should promote more policies that create affordable housing. One of the most famous of these proposals, California’s SB 50, which is currently being debated in the state legislature, would allow for more dense housing development near transit hubs across the state, regardless of local rules.

Affordable housing is a transportation issue, too

The “affordability” of housing isn’t all about the housing itself: As rising rents and home prices push low- and middle-income households farther from major urban centers—where the greatest number of jobs and the most robust public transit systems tend to be—lower housing costs in suburbs and exurbs get offset by increased spending on transportation.

Much of this sprawl can be attributed to zoning choices made at the city level that have created expensive downtown business districts. This means middle-class workers living outside of the city center must rely on inconsistent public transit systems or long car commutes. A 2016 Brookings Institute study found that communities of color and high-poverty neighborhoods saw the highest decline in job proximity between 2000 and 2012.

Take, for example, Phoenix, Arizona, a city characterized by sprawl and its lack of a strong public transit system. Phoenix residents across income brackets spend nearly 50 percent of their earnings on housing and transportation.

In other words, there’s more to consider than just the rent. A report from Harvard’s Joint Center on Housing Studies examined household expenditures at varying income levels and showed that as housing costs decreased, the share of income spent on transportation increased by up to five times.

And that’s not to mention increased time spent commuting to and from work, which eats into leisure and sleep. Among the working poor, who already feel burdened by an ever-growing affordability crisis and stagnant wages, this can be a tradeoff that’s hard to stomach.

Transit access underscores how the affordability crisis, and the increasing distance between affordable homes and good jobs, warps so many aspects of how and where we live. As with public policy and labor and materials shortages, transportation is another aspect of this multifaceted crisis and will need to be taken into account in the hunt for a lasting solution.