Podcast Summary: Optimist Economy

Episode: "We Don't Have a Housing Shortage. We Have a Paycheck Shortage."

Hosts: Kathryn Anne Edwards (Economist) & Robin Rauzi (Editor)
Date: February 10, 2026

Overview of Main Theme

This episode challenges the dominant narrative that the U.S. housing crisis is purely a problem of supply ("not enough homes") and instead argues that housing unaffordability is best understood as a wage problem. Hosts Kathryn Anne Edwards and Robin Rauzi explore how stagnant incomes, rising income inequality, and misguided policy responses have created a mismatch between available housing and what Americans can afford. The discussion aims to empower listeners by showing that solutions depend more on addressing income and labor market dynamics than on simply building more—or deregulating—housing construction.

Key Discussion Points & Insights

1. Homeownership & Housing Market Data: Looking Beyond Panic (10:15–12:00)

• Stability in Homeownership: The U.S. homeownership rate is stable, not in freefall, having rebounded from post-2008 lows. Currently, it sits around 65–66%, down from a peak of 69% in 2005, but no longer dropping.
• Mortgage Debt Service: Americans are spending a smaller share of disposable income on mortgages than before the pandemic, suggesting no runaway crisis in aggregate terms.
• Edwards’ Framing: “I don’t say that to be like, ‘up and here’s the economist with the data that says your struggle is fake, because the data says you’re wrong.’ ... It is good that those things are stable and they’re not flashing red. But…if you don’t think about the actual cause of the problem, you’ll never solve it.” – Kathryn Ann Edwards (06:23)

2. Households vs. Housing Units: What Do We Actually Need? (12:00–13:05)

• A housing unit is built for a household, not simply each person. A household = all people sharing a home (e.g., roommates = 1 household).
• Household formation has slowed since the Great Recession; fewer new households means less net demand, partially driven by young adults staying home longer, lower marriage rates, and the high cost of independent living.

3. The Real Shortage Is Affordability, Not Supply (14:04–15:21, 22:06–24:11)

• Most “housing shortage” talk is about distribution, not raw totals—housing exists, but in the wrong places, sizes, and especially at unaffordable price points.
• There's a growing misalignment between what is built (often luxury apartments or homes) and what incomes at the bottom and middle can afford.
• “To the extent that we have a housing shortage, it’s not a net shortage, like we have more people than houses. It is a distributional shortage where we don’t have enough housing for people at the place people can afford.” – KAE (13:05)

4. Why 'Build More' Alone Won’t Work (15:21–17:18; 23:44–24:11)

• Private developers have no incentive to build ‘below market’ housing for low or middle incomes—building is concentrated at the top.
• “There are wages in the US for which there is no housing that is affordable for someone who makes that little money. And we will not build it. No one out there is like, we’ve got to go out and build housing for people who are going to pay me $700, $800 [per month].” – KAE (15:21)
• Only government can supply genuinely affordable housing via policy, historically or today.

5. Income Inequality: The Heart of the Housing Problem (22:06, 32:56–35:46)

• The hosts emphasize five decades of growing income inequality. The housing stock—many units built decades ago—does not reflect today’s dramatically skewed income distribution.
• Typical mortgage payments now outpace typical wages (Median mortgage: $2,259/month; median full-time worker: $1,200/week), resulting in a persistent, systemic gap that supply alone can’t address.
• “That $500 gap [per week] is not going away with a supply, like a infusion of supply. That is an income and wage problem.” – KAE (23:49)
• “This is a consequence of long-term income inequality that we now are mismatched to our housing stock.” – KAE (35:29)

6. Policy Myths & Misfires (6:35–7:32; 24:11–27:27)

• 50-Year Mortgage Fiasco: The hosts mock the failed proposal for 50-year mortgages as a distraction from root causes. “That’s…such a bad policy.” – KAE (06:55)
• Deregulation and longer mortgages help banks and developers but don’t create affordability for low- and middle-income families.
• The myth that simply eliminating housing regulations or building more luxury units will improve affordability for everyone is debunked.

7. The ‘Piggy Bank’ Mentality: Housing as Investment (28:06–30:42)

• The idea that a home must appreciate greatly—and serve as an investment vehicle—drives policy distortions and public resistance to affordable housing.
• “I don’t think people should make money off their houses. I think it warps a lot of decision making to have so much of an investment [in one asset].” – KAE (29:15)

8. The Call for Policy Solutions: Income, Public Investment, and Empowerment (35:46–37:38)

• Mainstream American policy supports only the very poor (e.g., public housing), but little is done for the middle-class.
• Government can and should build or subsidize middle-income housing, not just rely on tax credits for the very poor.
• “If we make this about what the government can directly intervene in the housing market, we get to design our solution.” – KAE (37:38)
• “Enough income can solve this problem. Enough housing cannot.” – KAE (27:22)

9. Additional Memorable Moments & Social Commentary

• Notable Quote: “You need to go out there and demand unionization if you want affordable housing. Like, we need better income.” – KAE (34:26)
• The hosts joke about being homeowners and—Robin admits—a landlord, aware that their perspectives might attract criticisms on social media for not representing renters, but stress systemic analysis and empathy.
• Discussion on the dysfunctional cycle of housing policy, property taxation, and efforts to keep housing a “privileged good.”

Notable Quotes with Timestamps

• "It is a distributional shortage where we don't have enough housing for the people at the place that people can afford."
  – Katherine Ann Edwards (13:05)
• "There are wages in the US for which there is no housing that is affordable for someone who makes that little money."
  – Katherine Ann Edwards (15:21)
• "Supply will only get you out of this if you have the government aggressively building homes that are below market rates. The market will not build below market rate homes."
  – Katherine Ann Edwards (24:12)
• "That $500 gap is not going away with a supply, like a infusion of supply. That is an income and wage problem. And the more we focus on supply, like, supply is not getting you out of this."
  – Katherine Ann Edwards (23:44)
• "I don’t think people should make money off their houses. I think it warps a lot of decision making to have so much of an investment, you know, putting a lot of money in just one stock."
  – Katherine Ann Edwards (29:15)
• "The solution to the housing affordability problem is truly about what we are willing to ask for, and that is optimism because that puts agency back in our hands."
  – Katherine Ann Edwards (37:34)

Timestamps for Key Segments

• Homeownership & Housing Market Reality Check – 10:15–12:00
• Households vs. Housing Units – 12:00–13:05
• Affordability, Not Supply, As the Real Shortage – 13:05–15:21
• Policy Misfires (50-year mortgage, deregulation) – 6:35–7:32
• The Role of Income and Inequality – 22:06–24:11, 32:56–35:46
• Housing as Investment & Public Attitudes – 28:06–30:42
• Empowerment & Policy Solutions – 35:46–37:38

Tone and Language

The conversation is lively, sometimes irreverent but deeply informed, mixing economic data with personal anecdotes and witty asides. Kathryn Ann Edwards is especially sharp in her critique of conventional narratives, bringing both a data-driven and values-oriented approach.

Conclusion

Main Takeaway:
America’s housing problem is not a mere shortage of units—it's a profound mismatch between what’s available (and at what price) and what American workers earn. The solution lies not in just building more homes, but in demanding better incomes, addressing inequality, and empowering public action for genuinely affordable housing.

Optimism:
By recognizing the root cause (paycheck shortage), listeners are encouraged to advocate for policy change, higher wages, and government intervention that truly serves the majority.

Executive orders, spiritual sponsors, and lighter moments follow the main interview, emphasizing the podcast’s conversational style and the hosts’ personalities.