Email)">
Despite persistent efforts and conventional strategies, communities nationwide continue to face significant challenges in creating sufficient affordable housing.
This article explores a new lens—systems thinking—that helps uncover the deeper, often overlooked, reasons why standard solutions fall short and offers a path to more impactful change.
Identifying specific "leverage points" within your community's unique housing ecosystem can lead to more strategic interventions and, ultimately, more sustainable and equitable outcomes.
One reason is that communities often don’t focus enough on the areas of the housing system where change can make the biggest difference
Systems thinking is an approach that offers a different lens. It’s a way of understanding complex issues by looking at how all the parts work together as a whole, rather than examining each part in isolation. So, rather than fixating on symptoms of affordable housing, it urges us to examine the structure behind those symptoms and intervene where change has the greatest potential.
Donella Meadows, an MIT professor and pioneer of systems thinking, identified 12 places called ‘leverage points’ where change can make the biggest difference, ranked from least to most effective. Think of it like conducting a public meeting. You can respond to each individual complaint as it comes, or you can step back and focus on the deeper issues, such as how decisions are made, how people are invited to participate, and how trust is built over time. The deeper you go, the more powerful, lasting, and impactful the change.
Most of the affordable housing solutions communities employ have shallow impact. Deeper impacts can be made by asking more thoughtful questions about the decisions we make, why we make them, and how to better address the underlying systemic challenges that contributed to the need for more affordable housing.
A housing system isn’t just about units and dollars or supply and demand. It is the fuzzy sum of policy, behavior, economics, physical form, social norms, mental models, and the deep-seated beliefs and assumptions that shape our approach. In the case of housing, that system continues to reward certain outcomes (e.g., luxury, profit, exclusivity) while struggling to deliver others (e.g., affordability, equity, community). We can’t build our way out of that by exclusively taking low-impact action at the margins. But we can learn where to push by better understanding how and where our actions impact the housing system.
Using Donella Meadows’ model as a frame, the sections below outline 12 leverage points—places where change can make the biggest difference—along with potential actions, ranked from least to most effective, to help advance affordable housing solutions.
12. Parameters are the first place most local governments act. This includes tax credits, subsidies, and code updates. These efforts matter. Changing the flow of funding or updating certain requirements can support short-term affordability. But these are low-impact moves unless they trigger higher-order shifts. Consider subsidies: offsetting the price to build housing is helpful, but if the housing system primarily rewards profit maximization, then affordability will continue to be systematically elusive long-term.
11. Buffers refer to the amount of available housing stock. Market-rate housing is available in higher quantities so it has a deep buffer. Affordable housing is scarce, so it does not. Shifting that balance through actions like deed restrictions, land banks, and inclusionary development policies is one way to increase the size of the buffer for affordable housing. But it’s a delicate balance: having too much stock – a large buffer – even of affordable units, can fail to meet the present needs of a community. The key to a sustainable and resilient housing system is balance and adaptability.
10. Physical layout matters. Much of our housing crisis is locked into infrastructure decisions made a century ago. Street grids, utility capacity, and development patterns all constrain what is possible today. Retrofitting those systems is slow and expensive. But long-term plans for greenfield development and intentional redevelopment can shift the ground we build on.
9. Delays are another key factor. Housing takes time to plan, finance, permit, and construct. Meanwhile, people move to town, families grow, and demand changes. Local governments often focus on accelerating development. Rarely do they ask whether growth itself should be better aligned with the timing of housing production. Matching the pace of demand with the pace of delivery can prevent many of the shortages faced today in the future.
8. Negative feedback loops are stabilizing forces within a system. They act as corrective mechanisms, pushing back when things drift too far in one direction to help maintain Think of a negative feedback loop like a home thermostat: when the temperature rises too high, the thermostat signals the system to cool things down. If the signal is too weak, too slow, or ignored, the house overheats. The same is true in housing. When prices rise beyond reach, a strong corrective feedback loop should help bring the system back into balance. Without strong, responsive feedback, the system stays on a path of growing unaffordability.
The current affordability crisis is a clear signal that the housing system is out of balance. Unfortunately, responses such as modest subsidies and voluntary incentives have not matched the scale or urgency of the problem. As Donella Meadows explains, negative feedback loops must be strong, timely, and accurate enough to meaningfully influence and stabilize unsustainable system behavior. Without that strength, systems continue to spiral into dysfunction. A real-world example of a stronger feedback loop can be seen in Montgomery County, Maryland, where inclusionary zoning policies require that a share of new housing remain affordable whenever development occurs. This built-in mechanism allows the system to respond in real time, helping to correct against rising housing costs.
7. Positive feedback loops amplify advantage. Unlike negative feedback loops, which work to stabilize systems, positive feedback loops reinforce and accelerate change, whether beneficial or harmful. Think of a positive feedback loop like a snowball rolling down a hill: as it moves, it gathers more snow, growing larger and faster with each turn. In housing, a harmful example of this snowball effect is the role of institutional investors who purchase large numbers of homes. As they acquire more properties, their financial advantage grows, allowing them to outcompete first-time buyers and drive up housing prices. The more they own, the more they can afford to buy, creating a self-reinforcing cycle that reduces housing access and affordability over time. This is where local governments can intervene by introducing strong negative feedback loops, like the inclusionary zoning policies described above, along with other tools like ownership caps, progressive tax strategies, or policies that prioritize community-based ownership models.
At the same time, governments can intentionally leverage positive feedback loops to promote housing affordability. For example, investing in the professional development of municipal staff can lead to better performance, which builds internal capacity and creates compounding benefits over time. This is an approach used by the City of Issaquah as part of its organizational strategy. In this way, positive feedback loops can either reinforce harmful dynamics or be purposefully designed to drive beneficial, lasting change. The key is recognizing the snowball effect and guiding it in the right direction.
6. Community engagement is often overlooked but deeply powerful. In most communities, feedback to local government often comes from small and regular but not necessarily representative groups of active residents, developers, and interest groups. To systematically improve outcomes, local governments need to engage more effectively with their communities to elicit better information. That means meeting people where they are – on their porches, at neighborhood meetings, online, and in their languages – and embracing active listening to better understand and meet the needs of the community. Building new models of community engagement could transform how housing policy is shaped.
5. Rules shape outcomes. Setting standards for parking minimums, building codes, and profit thresholds all contribute to high-end development. Revisiting those rules and who gets to interpret them is a critical leverage point. Local governments can streamline approvals for affordable housing, shift discretionary review to administrative review, and ensure that rules support rather than hinder more affordable development. For example, the City of Fort Collins’ newly adopted Land Use Code improves approval timelines and lowers risk for affordable housing developers by shifting affordable housing from a discretionary to an administrative review process.
4. Creativity and innovative thinking is key. Our housing policies often assume a preferred, default model: the single-family detached home. That vision, rooted in the post-WWII American dream of our great-grandparents and grandparents, limits our imagination. Affordable housing can exist in many forms. Allowing innovation from cottage courts to co-housing is essential. Experimentation is not a risk. It is a necessity. Fortunately, local governments everywhere are innovating every day. Communities can expedite innovative and best-practice solutions by taking inspiration from affordable housing solutions from local governments around the world. These lessons can then be adapted to the local context to address local needs.
3. System goals matter more than most realize. Is housing a commodity? An investment? A human right? Infrastructure for the community? How a community answers these questions shapes every policy choice. If the primary goal is private profit, affordability will always be elusive. But if the goal is affordability, then new possibilities open. Local governments should adopt a strategic vision that reflects their affordable housing goals and aligns policies and actions accordingly.
2. Paradigm shifts are rare but powerful. For too long, we’ve built to match a 20th-century idea of success: detached homes, large yards, in suburban-style neighborhoods. For most, that paradigm is now both financially unattainable and unsustainable. A new paradigm that values affordability, quality, and community would produce entirely different types of housing and communities. But paradigms don’t shift on their own. They change when communities model new ways of living and work together in partnership with those ready to create and make the change they seek.
1. Outcome-based decision making is the highest leverage point. This means less focus on outputs, volume, and ideology and more focus on decisions that create real change. Housing doesn’t need one identity. It needs to be many things to many people. When we stop asking whether a project looks like what we’re used to and start asking whether it works for the collective well-being and common good of our communities, we empower ourselves to adapt and evolve toward more affordable housing solutions and toward a more sustainable, resilient, and prosperous future.
Affordable housing is not a simple problem with simple solutions. It is a complex problem and systems challenge that requires thoughtful and strategic action. Systems, importantly, do not change without intention. If communities want affordable housing communities must intentionally and strategically act to address each leverage point in the housing system.
Leverage point | Housing example | Example actions |
12. Constraints, parameters, numbers | Parameters like tax credits, subsidies, and zoning code updates are commonly adjusted to influence housing affordability. | Adjust zoning codes to allow more units per parcel; offer tax credits or subsidies for affordable housing. |
11. The sizes of buffers and other stabilizing stocks, relative to their flows | The housing stock itself acts as a buffer. Market-rate housing has a large buffer; affordable housing does not. | Implement deed restrictions, land banks, or inclusionary development policies to increase affordable housing stock. |
10. The structure of material stocks and flows | Infrastructure decisions from a century ago (like street grids and utility capacity) constrain today's housing possibilities. | Plan long-term redevelopment and greenfield development to shift spatial and infrastructure limitations. |
9. The lengths of delays, relative to the rate of system change | Housing development lags behind demand due to time needed for planning, permitting, financing, and construction. | Align population growth expectations with the timing of housing production; improve housing project timelines. |
8. The strength of negative feedback loops, relative to the impacts they are trying to correct against | The housing crisis is a feedback signal, but current responses (e.g., modest subsidies) have been too weak to counteract unaffordability. | Develop stronger policy responses to housing unaffordability, such as inclusionary zoning, that match the urgency of the problem. |
7. The gain around driving positive feedback loops | Institutional investors owning more housing create self-reinforcing affordability problems. Alternatively, knowledge growth among staff supports affordability. | Address ownership concentration; support staff training to enhance institutional knowledge and capacity. |
6. The structure of information flows | Feedback from the public is often from unrepresentative groups, leading to policy misalignment with broader community needs. | Create more thoughtful and effective public engagement methods. |
5. The rules of the system | Zoning codes, parking minimums, and other standards favor high-end development and disincentivize affordable housing. | Shift discretionary to administrative review for affordable housing; revise rules that inhibit affordable development. |
4. The power to add, change, evolve, or self-organize system structure | Default housing models (e.g., single-family detached homes) limit adaptation and innovation in affordable housing solutions. | Support innovative housing types like co-housing and cottage courts; replicate global best practices locally. |
3. The goals of the system | Whether housing is viewed as a human right or commodity shapes all related policy decisions. | Adopt strategic visions that explicitly prioritize affordability as a goal. |
2. The mindset or paradigm out of which the system - its goals, structure, rules, delays, parameters - arises | Belief in outdated housing ideals (e.g., suburban homes as the American Dream) restricts the types of housing communities allow or invest in. | Model new housing types and promote leaders aligned with new ideas of affordability. |
1. The power to transcend paradigms | Being open to a variety of housing forms and approaches rather than holding to one 'right' model allows more effective adaptation. | Evaluate housing based on effectiveness, not conformity to tradition; empower communities to explore diverse solutions. |
Raftelis’ Organizational Assessment team takes a thoughtful, informed, and practical approach when working with local governments to develop solutions for affordable housing and development. Reach out to Jordan Jerkovich at jjerkovich@raftelis.com to learn more about our recent work with cities like Fort Collins (CO), Issaquah (WA), Oklahoma City (OK), and Turlock (CA).
