In the U.S., subsidized housing is generally apartments that the government covers part of the cost for. You are eligible for it if your income is low. Generally, they aren't the nicest places in the world, but the people who live there pay less than the average rate for similar apartments. Some can be quite nice, but some are utter slums. You might also hear it referred to as "the projects."
So a "viable altnerative to subsidized housing" means "an idea that could work instead of what I described above.
You can also Google "Section 8 housing"