The phrase “affordability” has become a rallying cry for Democrats nationwide, propelled by recent victories like Zohran Mamdani’s win in New York City’s mayoral race and championed by prominent figures such as Senators Elizabeth Warren and Gavin Newsom. It’s a message resonating as voters grapple with rising costs and a growing sense of frustration around inflation. However, the term’s newfound prominence highlights a complex situation: economists suggest that prices aren’t likely to fall significantly absent a major economic downturn. Despite this, Democrats are eager to address cost-of-living concerns that have previously been overlooked.
Factional Debates & Explanations for the Crisis
While Democrats have embraced “affordability,” they’re grappling with internal disagreements about the root causes of the crisis. Competing explanations dominate the debate:
- Abundance theorists argue that supply shortages, often due to government-imposed bottlenecks like restrictive zoning laws and permitting delays, are the primary culprit.
- Populists point to corporate greed and Wall Street recklessness.
- Others blame a lack of antitrust enforcement, allowing monopolies to artificially inflate prices.
- Progressives maintain that the decline of unions and an overreliance on market forces are major factors.
Rather than seeking a unified diagnosis, these factions have largely defended their own perspectives, leading to fractured conversations and hindering a clear path forward.
A New Framework from the Economic Security Project (ESP)
To foster a more constructive dialogue, the Economic Security Project (ESP), a progressive organization focused on cash support and social safety nets, released a new analysis of affordability. This framework aims to divide the crisis into two core areas: problems within markets and challenges related to individual incomes. The ESP hopes this approach will lead to more specific political solutions and greater consensus among Democrats.
Analyzing Markets and Incomes
The ESP’s analysis identifies three key market failures:
- Gatekeepers: Entities that restrict supply, such as pharmaceutical companies patenting drugs or hospitals merging to limit choices.
- Fragmented markets: Situations where lack of customers render services unprofitable, leading to shortages in rural areas.
- Manipulated signals: Practices like junk fees and algorithmic pricing that obscure true costs and prevent consumers from making informed decisions.
On the income side, ESP argues that these forces contribute to unaffordability:
- Life-cycle mismatches: Costs, such as childcare and healthcare, tend to peak when income is lower.
- Inequality: Wages have not kept pace with productivity, leaving many families struggling to afford basic necessities (43% of families can’t cover them).
- Economic shocks: Recessions can lead to job losses and lasting financial setbacks.
Aligning with Existing Theories and the California Example
ESP’s framework incorporates existing theories, including the “abundance” concept, but argues that they are incomplete. As a case study, California’s recent policy changes demonstrate that addressing both market failures and income challenges can coexist— lawmakers have enacted upzoning laws to increase housing supply and implemented measures to curb algorithmic rent-setting and prescription drug price gouging. This highlights the possibility of Democrats championing diverse policies without internal conflict.
The Future of “Affordability” and Shifting Definitions
The term “affordability” has evolved significantly for Democrats. Previously, it represented a compromise between guaranteeing services and making them more accessible through market-based solutions. Today, however, it encompasses both approaches, allowing politicians to advocate for market-based solutions alongside universal programs. This shift demonstrates either sophisticated politics or a lack of clarity about priorities – do Democrats need to pick one path, or can they find common ground by fixing markets while also fighting for universal guarantees?
An Ongoing Debate and Unresolved Questions
While the ESP’s framework aims to bridge divides, it refrains from prioritizing causes, acknowledging that disagreements are inevitable and useful. However, the question remains: if political battles are ultimately about resource allocation, what value does a unifying framework offer if it sidesteps the most challenging decisions? Some argue the report gets the logic correct but misweights the causes – income distribution should be prioritized over theories like monopolistic pricing. Ultimately, ESP’s sector-specific reports planned for 2026 will be critical in determining whether this framework can tackle the most difficult questions and address a fundamental question: what should we stop trying to make people afford at all?
The article concludes by noting that Kamala Harris’ 2024 campaign successfully utilized “affordability” to encompass both market-based solutions and universal programs, signaling a potential shift in Democratic strategy
