Affordable Housing’s Always Been Hard. Now It’s Getting Harder.

Originally posted on Multi-Housing News | February 11, 2026

The U.S. is no longer simply grappling with housing affordability—it’s operating in a sustained affordability crisis. The number of households impacted has been growing steadily. Over the past decade, apartment rents have climbed significantly while wages have failed to keep pace, leading to financial hardship, especially among lower income Americans. These consumers are now driving significant demand for affordable units across the country. Unfortunately, all U.S. markets lack available supply to meet this demand. As a result, prospective renters are sitting on lengthy waiting lists to access affordable units and low resident turnover isn’t helping the queues. The pressure of the ongoing housing crisis has become tangible and visible at the site level, in leasing offices every day.

All these dynamics serve as a backdrop to notable developments happening within the affordable apartments industry. Here’s a snapshot.

The influx in capital now focused on affordable rentals is shielded somewhat from investment risk due to the growing and measurable gap between available unit supply and demand. And, as the investment and ownership landscape morphs, so too does the look and feel of affordable communities. Product in this category no longer just includes dilapidated units. Quality is rising, adding desirable amenities and supportive service partnerships reshaping these communities to meet a wide variety of community needs.

Even with institutional groups entering the affordable housing arena, challenges to the delivery of new units abound. New construction hurdles today are vast and include access to developable land at the right price point, a persistent labor shortage, NIMBYism, tariff and inflation influence on building material pricing and more. High overall costs challenge the financial feasibility of many new construction projects.

Unfortunately, there is no singular solution. Elevated strategy and a suite of approaches are required to make meaningful progress in the right direction. Delivering new supply now requires layered subsidies, creative capital stacks and sometimes strong local political alignment to close the existing gap that will meet demand. Access to reasonably priced land, tax incentives, finance availability, and a construction workforce are all considerations to making new construction financially feasible.

In addition to new construction and supply challenges, owners of existing affordable rental communities are also facing hurdles. Maintenance and rehabilitation efforts today are costly. Labor is as well, in part because of worker shortages. Additionally, the approaching maturity of Low-Income Housing Tax Credits, one third of which are set to expire by 2035, are making it harder for some to be a profitable owner of affordable communities. Continued longevity requires owners to evaluate recapitalization, or re-syndication strategies long before relief from the existing compliance periods. Rather than figure out a means to navigate around all these obstacles, some are simply deciding to retire out of the sector.

Changes to traditional federal funding sources are also making waves. Last year brought wide scale staff and funding reductions within HUD. In response, individual states are stepping in to fill the gap, leading to a diversification of funding initiatives. While diversification of funding can push opportunities forward, there are inherent challenges that accompany such shifts, especially the introduction of additional administrative burden.



Owners will now increasingly source funding for their affordable communities from various local and state programs, many newly established, rather than just from a single source at the federal level. An obvious accompaniment to this proliferation of new funding options is increased compliance. Compliance complexity is growing, and the margin for error is shrinking just as quickly. Additional regulatory considerations, rules, reporting requirements, and audits are not just complex, they are time-consuming, demanding strategic internal controls and expert oversight. The process inherently increases operational strain to owners. 

With these new challenges, it’s more important than ever that affordable apartment owners are plugged into operations, asset management and regulations related to their communities. Owners that succeed in this new environment will be those who prioritize partnership with the right agencies, operating partners and property managers. All will be key to accessing finance, mitigating risk and ensuring a community succeeds moving forward. While affordable housing developments remain mission-driven, there is now a need to operate with institutional-level sophistication.

Also, engaging with residents, the families we serve, should become a consistent operational discipline, rather than an afterthought. Residents live in the community and feel firsthand any struggles related to cost of living, transportation, childcare dynamics and more. Thus, they are the key source of real time market intelligence that data never truly captures in any given market. Resident feedback informs an owner whether the individual apartment community and its rents work for those residents and ultimately, whether the community is financially viable overall. The future of the affordable housing will favor owners who are willing to adjust, align their operations and treat both compliance and sound management as strategic tools for performance and protection, not simply requirements to satisfy.

Danielle Little is executive vice president of affordable housing compliance for Apartment Management Consultants, an apartment management firm operating a 158,000-unit portfolio across 25 states and all major multifamily asset classes.