America has been battling an affordable housing crisis for years, if not decades. The National Low Income Housing Coalition reported a shortage of 7 million affordable homes for 10.8 million low-income families.
At the same time, the National Housing Crisis Task Force said that since 2012, the number of rental units priced below $1,000 per month has dropped by 24%.
The statistics above—and others—provide compelling evidence of a problem. However, a recent RentCafe report offers other data. Since 2020, nearly 310,000 affordable rental units have come online, with close to one-third delivered in 2024.
According to RentCafe Research Analyst and report author Florin Petrut, the study’s results weren’t exactly unexpected, given a supportive policy environment. “What stands out is the magnitude of the growth,” Petrut told Connect CRE. “A 73% increase in affordable housing construction between 2020 and 2024 is indeed unprecedented, particularly in high-cost markets like Seattle and New York City, where building affordable housing has long posed significant challenges.”
He added that the report focuses exclusively on affordable buildings. It doesn’t include units developed through inclusionary zoning or mixed-income projects, which contribute more to the supply.
The Foundations of the Affordable Housing Surge
One reason for the uptick in affordable housing builds is due to the American Rescue Plan, which “has helped move things forward by directing billions of dollars into housing through state and local fiscal recovery funds.” Additionally, “at the state and local level, governments have reinforced these efforts with their own incentives, including state housing tax credits, zoning reforms and streamlined approval processes,” Petrut added.
Also, back in 2018, the Low-Income Housing Tax Credit’s (LIHTC) income-averaging provision allowed rental housing developments to be made available to a wider range of incomes, even as they qualified for tax credits. Petrut explained that the process has helped strengthen project economics.
Seattle and NYC Lead the Charge
The report put Seattle and New York City at the top of new affordable housing additions, with Austin, TX, in third place. “These cities share a common set of fundamentals that have positioned them as leaders in affordable housing construction,” Petrut explained. “They have strong housing demand, sustained public investment and supportive policy frameworks.”
While Seattle has voter-approved housing levies and a network of mission-driven developers, New York City leverages its decades of experience in affordable housing finance, relying on local incentives and bond-financing tools to complete projects. Meanwhile, in Austin, “local housing bonds and state tax credits have enabled large-scale developments,” Petrut said.
Another Texas city, San Antonio, reported a 222.54% five-year increase in affordable-unit deliveries, which accounted for nearly one-quarter of all housing built in the metro between 2000 and 2024. The Alamo City has supported these projects through the Strategic Housing Implementation Plan, LIHTC, and a partnership with the San Antonio Housing Trust Public Facility Corporation (SAHT).
Why the Negative Headlines?
With an increase in affordable unit deliveries, why do the National Low-Income Housing Coalition and National Housing Crisis Task Force point out the need for more? “One key point is that affordable housing development still represents a relatively small share of overall apartment construction,” Petrut said.
For instance, in 2024, out of the approximately 500,000 multifamily units delivered nationally, 91,000 (18%) were classified as affordable housing. This barely puts a dent in the 7.1 million unit shortage mentioned above.
Petrut said that unit increases are encouraging. Furthermore, RentCafe data shows ongoing momentum in affordable housing construction. Still, “closing the affordability gap will require keeping this higher pace up over many years to come, along with consistent public investment and a stable financing environment,” Petrut explained.
An earlier version of this article appeared on ApartmentBuildings.com.
The post The Quiet Truth About Affordable Housing: More is Being Built appeared first on Connect CRE.
