America’s Housing Shortage Persists: PolicyMap and Reinvestment Fund Update the Housing Gap Analysis to 2024

A year ago, PolicyMap partnered with Moody’s Analytics and Reinvestment Fund to publish what we believe is the most detailed, census tract-level analysis of the U.S. housing shortage to date. The findings were striking—and, unfortunately, they haven’t changed much. We’ve now updated the data to 2024, and the story remains the same: America’s cities are still falling short of the housing their residents need.

A Closer Look at the Housing Gap

When we first released this research, our goal was to move beyond broad national estimates and get specific—down to the census tract—about where housing shortfalls and surpluses actually exist. The methodology, developed jointly by Moody’s Analytics, PolicyMap, and Reinvestment Fund, compares current vacancy rates to each city’s historical equilibrium vacancy rate (defined as the average vacancy rate during the stable market period of 2012–2018, after the housing crash and before COVID-19). Where vacancy rates fall below equilibrium, a shortage exists. Where they’re higher, there’s a surplus.

The result is a nuanced, neighborhood-level view of housing supply that goes far beyond simple inventory counts—and it’s already being put to work. Philadelphia’s landmark $2 billion HOME initiative, which targets the creation or preservation of 30,000 housing units, relied directly on these estimates to quantify local need, apportion where new development is most urgently required, and match funding streams to the right income levels and neighborhoods.

What the Original Research Found

The initial study examined 350 American cities with populations over 100,000. The headline findings were clear:

• The housing shortage is not evenly distributed. Some neighborhoods have surpluses while others face acute need, and understanding that distribution is essential for effective policy.
• The gap is most acute for rental housing, particularly in moderate- and middle-income neighborhoods. These “workforce rental” areas have been the most underserved.
• High-income neighborhoods in large cities actually show a rental surplus in many cases—the market has served the highest earners reasonably well. The middle has been left behind.

The research was co-authored by Moody’s Analytics Deputy Chief Economist Cris deRitis and Chief Economist Mark Zandi, PolicyMap CEO & Founder Maggie McCullough, Reinvestment Fund Senior Advisor Ira Goldstein, and Urban Institute Nonresident Fellow Jim Parrott. It was covered by the New York Times’ DealBook newsletter and featured in a Moody’s Analytics podcast, “Housers on the Housing Shortage.”

The 2024 Update: What’s New

We have now updated the analysis using the latest five-year estimates from the American Community Survey (2020-2024), refreshing the data across the same 350 cities we studied last year. Here’s what we found:

Updated Data, Same Rigorous Methodology

The 2024 update draws on ACS five-year estimates spanning 2020-2024, providing the most current available snapshot of housing vacancy rates at the census tract level across all 350 cities.

The Shortage Persists Despite New Housing Units

Not surprisingly, the situation is very similar to what we found last year. While these cities collectively added approximately 465,000 new housing units over the past year, that growth was not enough to meaningfully close the gap.

Here’s how the numbers compare:

• 2023: These 350 cities were home to approximately 39.5 million housing units. Our tract-level analysis estimated a shortage of around 820,000 units-roughly 2% of the total housing stock.
• 2024: With approximately 40 million homes across these same cities, the shortage stands at approximately 831,000 units-still about 2% of the total stock.

Rental Housing — Especially for Middle-Income Households — Remains the Greatest Need

As with last year’s findings, the need is most acute for rental units, and it falls hardest on moderate- and middle-income communities while high-income areas in large cities continue to show surpluses in rental housing.  The private market has perhaps served those neighborhoods too well. But for the workforce households in the middle—teachers, nurses, service workers, and others who earn too much to qualify for subsidized housing but not enough to afford market-rate rents in many cities—the shortage remains severe.

Why Tract-Level Data Matters for Housing Policy

Knowing that a city faces a housing shortage is one thing. Knowing exactly which neighborhoods are undersupplied, by how much, and for whom – that’s what enables effective, targeted action. Philadelphia’s HOME program is a model for how this can work in practice: by overlaying housing gap estimates with income data, building permit activity, and city-owned land parcels, planners were able to identify not just how many units are needed, but where to build them and what financial tools to deploy.

The 2024 update reinforces the value of monitoring these trends over time. As cities like Philadelphia track their HOME program’s progress, updated gap estimates will serve as a key benchmark—helping planners see whether new development is actually closing the shortage or simply adding units in places that were already balanced.

Explore the Updated Data on PolicyMap

PolicyMap subscribers can now explore the updated 2024 housing gap data across all 350 cities at the census tract level. Dive into the maps to see total housing unit gaps, owner housing unit gaps, and rental housing unit gaps in your community—and layer in additional indicators like population change, home sale prices, income levels, or tax incentives to build a fuller picture.

Download the Research: “Bringing the Housing Shortage Into Sharper Focus”

The full white paper—co-authored by Moody’s Analytics, PolicyMap, Reinvestment Fund, and the Urban Institute—digs deeper into the methodology, research results, and policy implications behind the housing gap estimates. It’s an essential read for anyone working on housing policy, community development, or investment strategy.

Watch the On-Demand Webinar: “A Focus on the Housing Shortage”

Want to go even deeper? Watch our on-demand webinar, where Moody’s Analytics, PolicyMap, and Reinvestment Fund walk through the research findings, discuss the nature of the decade-long housing shortfall, and explore how supply and demand dynamics shape affordability in cities across the country. The session is designed to give policymakers, planners, and housing advocates a clearer foundation for understanding—and acting on—the challenge.

The Work Continues

America’s housing crisis didn’t develop overnight, and it won’t be solved in a single year. But the data is clear: we know where the shortfalls are, we know who is most affected, and we know that without sustained, targeted investment – especially in workforce rental housing – the gap will remain.It is difficult to make good policy and wise investment of public funds without sound data, objectively and rigorously analyzed, and that is why the housing gap measures are so foundational to HOME. Each year, the gap measures will be updated by the study team and will serve as one of the multiple measures HOME and all Philadelphians use to judge HOME’s impact.