Many American cities face a severe shortage of affordable housing — and not just for the poor, but well up into the upper-middle class. A recent report from Harvard’s Joint Center for Housing Studies concluded: “The rental market thus appears to be settling into a new normal where nearly half of renter households are cost burdened,” or paying more than 30 percent of their income in rent. What these cities need is a dramatic increase in the number of mid-range and affordable dwellings to ease the price pressure on their rental markets. They should address the problem directly: by constructing a large number of government-owned municipal housing developments. Unlike traditional American public housing, all city residents will be eligible to live there. There are two major benefits to this approach. First, it adds new rental capacity in the housing market directly where it is needed.