The city of Kampala, Uganda, is struggling with a housing deficit that is compounding each year and creating market distortions that threaten to derail recent economic success and destabilize the social fabric of the community. The majority of government and private developers who build new housing are only providing units affordable to Kampala’s minority of wealthy and well-connected elites. The majority of Kampala’s residents are low-income earners who currently live in unplanned slum neighborhoods that consist of mostly informal rental housing. Inflating land values, exorbitant infrastructure costs and the lack of affordable home finance mechanisms are preventing the delivery of affordable housing to the majority of city residents. The same factors that are compounding the housing crisis in Kampala can be leveraged and reversed to create new opportunities that incentivize the private sector to deliver housing for the low-income market. Developers who construct middle-class housing products should be given tax discounts in exchange for formal commitments to deliver simple and well-planned housing estates for low-income families. This strategy provides a monetary incentive for private developers to bring their project management efficiencies into the low-income market and facilitates the government’s need to placate social and political pressure to improve the local housing sector’s performance for Ugandans at all levels of household income.