In much of the United States, developers spend more to build an affordable apartment for a low-income family than a market-rate one just down the street – sometimes far more. It is one of the central paradoxes of the nation’s housing crisis: The affordable homes that lower-income renters need most tend to be the costliest to build.

Colorado is an exception. In a recent study of more than 140 housing developments in California, Colorado and Texas, researchers at RAND, a nonpartisan research organization, found that affordable apartments in Colorado cost about $50 less per square foot to build than market-rate units. Colorado was the only one of the three states where affordable developments cost less to build than market-rate ones.

I’ve spent nearly three decades trying to understand why affordable housing costs so much to build – and how to bring those costs down. I now direct the Center for Housing Research and Innovative Solutions at the University of Denver, where we study how to expand housing supply and affordability in Colorado and across the Rocky Mountain West. Earlier, I led the research office at the U.S. Department of Housing and Urban Development that studies housing markets, affordability and federal housing programs.

Throughout my career, I keep running into the same paradox: The tools designed to make housing affordable are also a big part of what makes it expensive to build.

When rent can’t cover the bill

At the core of the housing paradox, the numbers just don’t add up.

Affordable housing programs typically serve households earning well below their area’s median income, the midpoint where half of local households earn more and half earn less. Their capped rents fall below what it costs to build a new apartment, especially where land, labor and materials are expensive.

To close that gap, developers assemble multiple layers of public and private subsidies. The cornerstone is the federal Low-Income Housing Tax Credit, which gives investors a tax break in return........

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