Can We Fund More Homes Without Driving Prices Higher?
OPINION / COMMENTARY | Money & Housing Wednesdays — Episode 1
By Chris Manzano | Prepared and researched October 16, 2026
When government announces another housing investment, I want to ask a question before celebrating the dollar amount: What will this spending make possible that would not happen otherwise?
Will it help a family keep a roof overhead? Will it produce additional homes? Or will it mainly give more people the means to compete for homes that already exist?
Those are different outcomes. My view is that housing policy should be judged by what people can actually afford, the capacity it creates and the inflation risks it brings—not by the deficit alone. This opening installment applies that perspective to a practical choice: helping people pay versus helping communities build.
The MMT idea worth testing
Modern Monetary Theory, or MMT, emphasizes that a government issuing its own floating, nonconvertible currency faces different constraints from a household. Economist L. Randall Wray argues that taxes help sustain demand for that currency and can restrain spending pressure. In that framework, the important limit is not simply finding dollars; it is what an economy can supply without unacceptable inflation. That is an MMT interpretation, not a settled consensus. 1
It also does not remove real institutional rules. The Federal Reserve distinguishes its monetary-policy decisions from Treasury borrowing and says it does not buy newly issued Treasury securities directly from Treasury. A theory about the combined currency system is not permission to bypass how those institutions operate. 2
For housing, I think the useful test is narrower than proving an entire economic theory: Does the proposed spending relieve a shortage, or add pressure to one?
A grant and a construction connection do different jobs
Imagine a hypothetical program giving 100 qualified households $20,000 each toward buying an existing home. That is $2 million in assistance. Assume the near-term supply of suitable homes stays fixed.
Some recipients could overcome a cash barrier that otherwise kept them out. But the program has not created another home. It may also strengthen bids against other buyers. We cannot calculate the price effect from the grant amount alone; participation, seller responses, financing and competing demand all matter. This example is not an estimate of any Miami-Dade program.
Now imagine using that same hypothetical budget to address a documented water or sewer connection that prevents a viable housing project from proceeding. That is a different mechanism. But the word “infrastructure” does not prove success: engineers must establish the scope, builders must have a workable project, and land, permits, financing and crews must line up. I am not claiming $2 million would deliver any particular number of homes.
In September 2026 remarks, Federal Reserve Governor Michael Barr discussed land-use rules, permitting, construction productivity, labor and materials as interacting housing constraints. He also acknowledged that local rules can serve legitimate infrastructure and community needs. That argues for diagnosing the actual obstacle, not assuming every regulation or every funding shortfall is the problem. 3
What the evidence says—and does not say
Research by Brian Asquith, Evan Mast and Davin Reed, released as a February 2020 Philadelphia Fed working paper, found lower nearby rents relative to comparison locations after large market-rate apartment buildings opened in low-income areas. Those comparisons used locations slightly farther away or developed later. 4
That supports taking additional supply seriously. It does not establish that every building lowers every neighbor’s rent, that the same result applies unchanged to Miami-Dade, or that a public subsidy caused homes to be built that would otherwise never exist.
The last distinction is crucial. Paying for construction that would have happened anyway is not the same as purchasing additional housing. A responsible evaluation needs a credible estimate of what would happen without the program, including homes lost through demolition and private projects that might be displaced.
But I would not turn that concern into an argument against direct help. HUD’s randomized Family Options Study followed 2,282 families in 12 communities. Its three-year findings showed that priority access to long-term housing subsidies substantially improved housing stability and reduced food insecurity compared with usual care. Some employment measures were lower, too; the study does not describe benefits without trade-offs. 5
Those findings concern families experiencing homelessness. They do not establish what a countywide expansion would do to market rents. Still, keeping a family housed is a meaningful result even when the intervention does not add a building.
My preference is to evaluate immediate relief and additional supply together, without pretending they are interchangeable or forcing families to wait for construction before receiving help. Barr also notes that rental assistance can support new supply by providing a more reliable income stream for affordable housing. The two approaches need not work against each other. 3
The strongest objection: good intentions still consume resources
Economist Gregory Mankiw’s critique of MMT argues that the ability to issue currency does not eliminate government’s budget constraints over time. He points to inflation and interest-bearing reserves, and cautions that an economy operating below its ideal potential can still experience inflationary pressure. 6
Applied to our housing example, the objection deserves attention. A public project could compete with private builders for the same scarce crews and materials before it produces any homes. A useful long-term investment could therefore create near-term cost pressure. This is a risk to test, not a forecast that every project will do so.
Calling the spending “productive” cannot settle its timing, financing costs or opportunity costs. Nor should a low inflation reading today be treated as proof that every future commitment is sustainable. A proposal needs a delivery plan and a way to respond when its assumptions fail.
Five questions I would ask before calling it affordable
What is genuinely additional? Show completed, usable homes compared with a reasonable no-program baseline—not just awards, announcements or permits. Count preservation separately when the goal is to prevent existing affordable homes from being lost.
Which obstacle does this money remove? Identify the specific connection, approval, financing gap or workforce constraint. Explain why funding that step would change the outcome, rather than subsidize a project already moving forward.
What happens while we wait? Publish milestones, cost assumptions and signs of excessive competition for labor or materials. Explain how targeted household assistance fits the period before new units become available.
Who benefits, and what do they actually pay? Track household housing costs relative to income, access and stability—not just the price advertised on a new building. BLS distinguishes CPI shelter services from home purchase prices and mortgage-related ownership costs; those measures cannot substitute for one another. 7
How long does the benefit last? For publicly supported affordable units, explain maintenance funding, affordability protections and enforcement. Specify when rising costs, delays or weak results would trigger review. These are my proposed evaluation questions, not a description of an existing county program.
Washington’s role is not Miami-Dade’s balance sheet
Florida and Miami-Dade use the dollar; they do not issue it. Wray’s own explanation distinguishes state and local finances from those of a sovereign currency issuer. Local revenues and borrowing limits cannot simply be wished away. 1
Federal support and local delivery already intersect. HUD’s HOME program provides grants to states and localities for activities including construction, acquisition, rehabilitation and direct rental assistance. That shows the range of mechanisms available—not that funding is currently open for any particular applicant or that a proposed project qualifies. 8
For me, the question is not whether government should spend without limits. It is whether we are choosing limits and measures that match the problem. I want scrutiny of costs and inflation, but also scrutiny of a policy that produces impressive financial announcements without durable housing access.
More purchasing power and more places to live are not the same achievement. A credible affordability policy should explain which it delivers, for whom, when—and at what cost.
Next in Money & Housing Wednesdays: What would make housing spending inflationary—or productive? We will look more closely at how to identify the constraint before committing the next dollar.
Join the conversation
Which would you want a housing program to report first: additional homes, household cost relief or the obstacle it removed? Share your perspective with Chris Manzano at Chris@ChrisManzano.com or 305-999-5664.
Personal commentary and general economic education, not individualized mortgage, investment, tax or legal advice. Examples are hypothetical. Historical studies do not predict a particular local outcome. Sources were checked October 16, 2026; any eventual publication requires a freshness review.
Sources and further reading
1. What Are Taxes For? The MMT Approach — L. Randall Wray; Levy Economics Institute; May 16, 2014.
2. How does the Federal Reserve’s buying and selling of securities relate to federal borrowing? — Federal Reserve Board; Federal Reserve Board; Updated July 19, 2024.
3. A Long-Term View on the Costs of Shelter — Michael S. Barr; Federal Reserve Board; September 23, 2026; page notes a September 28 correction.
4. Supply Shock Versus Demand Shock: The Local Effects of New Housing in Low-Income Areas — Brian J. Asquith, Evan Mast and Davin Reed; Federal Reserve Bank of Philadelphia, Working Paper 20-07; February 2020.
5. Family Options Study: 3-Year Impacts of Housing and Services Interventions for Homeless Families — Summary Report — HUD Office of Policy Development and Research; U.S. Department of Housing and Urban Development; Summarizes October 2016 three-year findings.
6. A Skeptic’s Guide to Modern Monetary Theory — N. Gregory Mankiw; Harvard University author manuscript, prepared for the January 2020 AEA meeting; December 12, 2019.
7. Measuring Price Change in the CPI: Rent and Rental Equivalence — U.S. Bureau of Labor Statistics; BLS; Updated February 13, 2026.
8. Affordable Housing Programs — HOME overview — U.S. Department of Housing and Urban Development; HUD; Undated program overview; checked October 16, 2026.
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