Housing unit size distribution shows that very few single family homes are smaller than 1000 ft². Link is here. Smaller housing units tend to be multi-family. That is why some older, smaller sized apartments in low cost area are called "naturally occurring affordable housing", NOAH. Typically "affordable housing" is defined as government subsidized housing, which is not "naturally occurring".

Compared to what bottom 50% income Americans can afford, there is a shortage of millions of affordable housing, naturally occuring or not. The main reasons are (1) it is difficult to find suitable land that allows building starter homes due to zoning and deed restrictions, and (2) the market favors larger higher cost housing as it is more profitable to serve the people who has more money to pay.

More starter homes can be built by a combination of favorable government policy and people working together for the goal of increasing homeownership rate.

Our vision is to add at least 30,000 naturally affordable homes per year to the Houston area, priced $50k to $200k.

Link is here.

We need to start another trend of building more smaller homes.

For a one-person household, 600 ft² would reach the average size. For a double occupancy in an efficiency apartment, each person would have about 250 ft² living area. For college students in double occupancy dorm of 12x20ft, 120 ft² each. As home cost is proportional to living area, other factors being equal, choosing smaller living area per person means lower housing cost per person.