Many observers claim that we are in the midst of an “affordable housing shortage” or, even worse, an “affordable housing crisis.” The primary concern is that too many households live in “unaffordable” rental units. We hope to clarify the current debate by first measuring the size of the problem, then diagnosing its underlying causes and, finally, discussing treatments that policymakers should consider. While our review is hardly exhaustive, we conclude that a shortage of income is largely behind the rental problem despite the current focus on housing. Policymakers should recognize that government financing of new housing units is unlikely to be a cost effective response to low household income. Measuring the number of unaffordable housing units first requires a definition of affordability. In this debate, a unit is considered unaffordable if a household has to spend more than 30 percent of its income on it. We use this standard to measure the size of the “shortage” because of its public prominence, even though we recognize that such a standard must be subjective. We also restrict our analysis to the rental-housing market; the owner-occupied market remains affordable by the commonly used standards. We find that the housing “crisis” is heavily concentrated among one subset of the population poor renters.