Imagine a country where there are only 34 affordable homes for every 100 of its lowest-income families; this is the stark reality of America's affordable housing crisis, a deepening shortage documented by a cascade of alarming statistics from declining production to rising evictions.
Key Takeaways
- In 2022, the U.S. had a shortage of 7.3 million affordable homes for extremely low-income renters
- Only 34 affordable homes existed for every 100 extremely low-income renter households in 2022
- From 2019 to 2022, the production of homes affordable to households earning less than $30,000 annually declined by 37%
- Median home price-to-income ratio reached 5.5 in 2023, up from 3.0 in 2000
- Rent as a share of median income rose to 30.4% in 2022 from 28.5% in 2019
- In 2023, 22.1 million renter households (42%) were cost-burdened, paying >30% income on housing
- LIHTC funding supported 125,000 affordable units in FY2023
- Section 8 vouchers served 5.1 million people in 1.8 million households in 2023
- HUD's 2024 budget request included $32 billion for rental assistance, up 10% from 2023
- In 2023, 16.5 million low-income households had worst case housing needs
- Black households faced 2.5x higher severe cost burden rate (26%) than whites (10%) in 2022
- 7.7 million ELI renter households (50%) lived in severely inadequate housing in 2023
- Rent growth projected at 4.5% annually through 2027
- Multifamily demand to add 400,000 units/year needed 2024-2028
- Home prices expected to rise 3.5% in 2024, affordability index to 95 by 2025
The affordable housing shortage is worsening despite growing demand and inadequate supply.
Affordability and Costs
- Median home price-to-income ratio reached 5.5 in 2023, up from 3.0 in 2000
- Rent as a share of median income rose to 30.4% in 2022 from 28.5% in 2019
- In 2023, 22.1 million renter households (42%) were cost-burdened, paying >30% income on housing
- Severely cost-burdened renters increased to 8.9 million households (17%) in 2022
- Median asking rent rose 8.5% to $1,711 in 2023, outpacing 4.1% wage growth
- In 2023, 74% of lowest-income renters were cost-burdened, with 45% severely so
- Housing cost burden for Black renters hit 51% in 2022, vs 39% for white renters
- From 2019-2023, real rents increased 20% in the bottom quartile markets
- In 2023, the income needed for a modest 2-bedroom rental was $28,000 in smallest metros, up 15%
- Eviction filings rose 25% in 2023 post-moratorium, correlating with 10% rent hikes
- In 2022, 12 million households paid over 50% income on housing
- Rent growth averaged 7.5% annually 2021-2023, vs 2.5% pre-pandemic
- In 2023, affordability index for first-time buyers fell to 92.3, lowest since 1982
- Utility costs added $200/month burden to 30% of low-income renters in 2022
- In high-cost metros like NYC, 80% of renters were burdened in 2023
- From 2020-2023, shelter CPI rose 25%, driving inflation
- In 2023, 55% of renters under 25 were severely burdened
- Median rent for studio apartments hit $1,459 in 2023, requiring $58,360 income
- Property insurance premiums surged 30% in 2023, adding $150/month to affordable housing costs
- In 2022, 28% of homeowners were cost-burdened, up from 22% in 2010
- Lowest-income decile spent 57% of income on housing necessities in 2023
- In 2023, effective affordability gap for ELI renters was $12,700 annually per household
- Rent-to-income ratio averaged 32% for families with children in 2022
- In 2023, 65% of voucher households still paid over 30% income due to payment standards
- Homeownership affordability for median income fell 40% since 2020 due to rates and prices
- In 2023, 1 in 4 low-wage workers (under $15/hr) were housing insecure
Affordability and Costs Interpretation
The American dream now demands a ransom note, where buying a home requires a salary that's soared while wages crawl, where renting consumes an ever-larger and more brutal share of paychecks, leaving millions—especially the poor, the young, and people of color—crushed between rising evictions, relentless rent hikes, and the simple, desperate math of survival.
Demographics and Need
- In 2023, 16.5 million low-income households had worst case housing needs
- Black households faced 2.5x higher severe cost burden rate (26%) than whites (10%) in 2022
- 7.7 million ELI renter households (50%) lived in severely inadequate housing in 2023
- Seniors (65+) renters grew 40% from 2010-2020 to 5 million households
- In 2022, 40% of renter households had incomes below $35,000
- Hispanic renters increased 60% since 2000, now 25% of total renters
- Families with children under 5 comprised 25% of cost-burdened renters in 2023
- Disabled individuals represented 15% of voucher waitlist applicants in 2023
- Single-parent households had 55% cost burden rate in 2022
- Rural low-income households (12 million) had 20% overcrowding rate in 2021 AHS
- In 2023, 30% of Native American households on reservations lacked affordable options
- Youth aging out of foster care (20,000/year) face 40% homelessness risk without housing aid
- In 2022, 6 million working households earned <50% AMI but unsubsidized
- Female-headed households had 48% burden rate vs 35% male-headed in 2023
- Veterans comprised 10% of homeless (35,000) in 2023, down 50% since 2010
- In 2023, 2.1 million large families (5+ members) were severely burdened
- Immigrants (non-citizen) renters had 45% cost burden in 2022 ACS data
- Students (college age renters) saw 35% increase in burdens since 2019
- In 2023, 25% of essential workers (healthcare, etc.) were rent-burdened
- LGBTQ+ youth represented 40% of homeless youth needing housing in 2023
- In 2022, 55% of poor renters lived in suburbs, up from 40% in 2000
- Households with Alzheimer's/dementia patients had 60% higher housing instability
- In 2023, 1.2 million farmworkers faced seasonal housing shortages
- Ex-offenders (700,000/year released) had 50% housing denial rate in 2023
- In 2022, 8 million minority homeowners were at risk of cost burden increases
- By 2030, senior renter households projected to reach 8 million
Demographics and Need Interpretation
America's housing crisis is a hydra-headed monster, where for every hopeful statistic like the 50% drop in veteran homelessness, a dozen more alarming heads sprout—be it the 2.5x higher cost burden shouldered by Black households, the 40% of LGBTQ+ youth in homelessness, or the projected 8 million senior renters by 2030—painting a dire portrait of systemic failure that spans race, age, family status, and zip code.
Government and Policy
- LIHTC funding supported 125,000 affordable units in FY2023
- Section 8 vouchers served 5.1 million people in 1.8 million households in 2023
- HUD's 2024 budget request included $32 billion for rental assistance, up 10% from 2023
- In 2023, 42 states expanded LIHTC allocations, totaling $14 billion in credits
- HOME program awarded $1.25 billion for affordable housing in FY2023
- As of 2024, only 1 in 4 eligible households receive rental assistance
- CDBG funds supported 100,000 affordable units in 2022 through local grants
- In 2023, 15 new states adopted or strengthened good cause eviction laws
- FHA multifamily loans insured $15 billion for 80,000 affordable units in 2023
- RAD conversions preserved 120,000 public housing units by 2023
- In FY2023, $4 billion in HTF grants funded 50,000 affordable homes
- 2023 saw 30 states increase minimum wage, aiding 2 million low-income renters
- Project-based Section 8 contracts covered 1.2 million units, with 300,000 expiring by 2025
- In 2024, 12 states passed inclusionary zoning mandates for new developments
- USDA Section 515 preserved 20,000 rural units with $1 billion in FY2023
- Emergency rental assistance from 2021-2023 aided 10 million households
- In 2023, 25 cities adopted rent stabilization covering 1 million units
- GSEs (Fannie/Freddie) financed 400,000 affordable units via DTI flex policies in 2023
- 2022 IIJA allocated $50 billion for affordable housing infrastructure over 5 years
- By 2023, 80% of PHAs adopted small area FMRs for vouchers
- State HAF programs distributed $5 billion post-2021 moratorium
- In 2023, LIHTC equity raised $30 billion for 140,000 units
- PBV vouchers grew 20% to 100,000 units since 2018
- 2023 farm bill proposed $2 billion boost for Section 521/514 rural rental aid
- 35 states offered property tax relief to 2 million low-income homeowners in 2023
- HUD's 2023 Green Retrofit program funded $500 million for 50,000 units
- In 2024, 10 states legalized ADUs statewide, potentially adding 1 million units
Government and Policy Interpretation
Despite billions in funding and laudable state-level initiatives expanding the affordable housing toolbox, the sobering reality remains that this immense effort is still a tactical victory in a losing strategic war, as only one in four eligible households actually receives the help they desperately need.
Supply and Development
- In 2022, the U.S. had a shortage of 7.3 million affordable homes for extremely low-income renters
- Only 34 affordable homes existed for every 100 extremely low-income renter households in 2022
- From 2019 to 2022, the production of homes affordable to households earning less than $30,000 annually declined by 37%
- In 2022, just 7% of new rental units built were affordable to households earning $35,000 or less
- Over the past decade ending 2022, the multifamily housing stock affordable to the lowest-income renters shrank by 2.2 million units
- As of 2023, 48 states plus D.C. faced critically low vacancy rates (below 5%) for apartments affordable to extremely low-income households
- In 2023, the national rental vacancy rate for units affordable to extremely low-income renters was 3.6%
- From 2021 to 2022, the inventory of rental homes affordable and available to extremely low-income renters dropped by 187,000 units
- In the Midwest, 91% of extremely low-income renters lived in neighborhoods with concentrated poverty in 2022
- The U.S. needs to produce or preserve at least 200,000 affordable rental homes annually to meet demand through 2030
- In 2023, construction starts for multifamily units affordable to low-income households fell 25% from 2022 peaks
- As of 2024, only 11% of the U.S. rental stock is both affordable and available to extremely low-income households
- Between 2010 and 2020, the number of affordable units lost to substandard conditions rose by 15% in major metros
- In 2022, new supply of homes for households under 50% AMI was just 1.5% of total housing starts
- Preservation needs for at-risk affordable multifamily properties total 1.4 million units by 2025
- In 2023, 40% of new apartment completions were in luxury segments, leaving affordable production at 20%
- The U.S. affordable housing gap grew to 7 million units in 2023 from 6.8 million in 2021
- Rural areas had only 25 affordable units per 100 low-income households in 2022
- From 2001-2021, 2.3 million low-income rental units were lost due to upgrades raising rents above affordability thresholds
- In 2024 Q1, multifamily permits for affordable units dropped 30% year-over-year
- In 2022, 18.8 million low-income renter households competed for 11.2 million affordable units
- By 2030, an additional 1.5 million affordable units must be preserved to avoid further shortages
- In 2023, only 6 states met the 10% threshold for affordable rental production relative to need
- Teardown and rebuild of affordable single-family homes removed 50,000 units annually pre-2020
- In 2022, the Northeast had the lowest availability at 7 affordable homes per 100 ELI renters
- LIHTC-financed units totaled 3.5 million since 1986, but 400,000 at risk of loss by 2030
- In 2023, 25% of affordable units built were in high-opportunity areas, up from 15% in 2010
- Subsidized housing stock grew by just 1% from 2010-2020 amid 20% population increase in renters
- In 2024, adaptive reuse projects added 15,000 affordable units nationwide
Supply and Development Interpretation
Despite the clear and growing need for affordable housing, the market seems to be moving backwards with the urgency of a spectator at a snail race, as statistics reveal a widening gap between units lost and the painfully slow trickle of new, truly affordable homes being built.
Trends and Future Outlook
- Rent growth projected at 4.5% annually through 2027
- Multifamily demand to add 400,000 units/year needed 2024-2028
- Home prices expected to rise 3.5% in 2024, affordability index to 95 by 2025
- By 2035, 11.6 million more cost-burdened households without intervention
- Institutional investors bought 20% of affordable single-family homes in 2023, trend to continue
- Modular construction to comprise 15% of affordable builds by 2030
- Climate migration to Sun Belt to increase affordable demand 25% by 2040
- Remote work enables 10% more households to afford rural affordable housing by 2025
- PropTech investments in affordable sector hit $2 billion in 2023, doubling prior year
- Short-term rental conversions reduced long-term affordable stock by 100,000 units since 2019
- By 2030, 50% of new affordable units to incorporate net-zero standards
- Generational wealth transfer ($84 trillion by 2045) to boost first-time affordable buyers
- ADU production projected to add 500,000 units by 2028 in permissive states
- Rent control expansions to cover 15% more units by 2026 in 20 metros
- Supply chain improvements to reduce affordable build costs 10% by 2025
- Homelessness to rise 20% without $10 billion annual voucher expansion
- Single-family rentals to grow 5% annually, absorbing 30% of affordable demand
- AI-driven site selection to accelerate affordable development 25% faster by 2027
- Interest rates stabilizing at 5% to improve financing for 100,000 more units/year post-2024
- Pandemic-era telehealth reduces senior housing needs by 10% through 2030
- Co-living models to house 1 million millennials in affordable shared units by 2030
- Zoning reforms in 100 metros to unlock 2 million units by 2030
- ESG financing to fund 20% of new affordable projects by 2028
Trends and Future Outlook Interpretation
We are caught in a perfect storm of soaring demand, hopeful innovations, and stark economic pressures, where building affordability is a race against time that we are not yet winning.
Sources & References
- Reference 1JCHSjchs.harvard.eduVisit source
- Reference 2NLIHCnlihc.orgVisit source
- Reference 3NAAHQnaahq.orgVisit source
- Reference 4CBPPcbpp.orgVisit source
- Reference 5URBANurban.orgVisit source
- Reference 6HUDUSERhuduser.govVisit source
- Reference 7PRESERVATIONDATABASEpreservationdatabase.orgVisit source
- Reference 8NMHCnmhc.orgVisit source
- Reference 9CENSUScensus.govVisit source
- Reference 10NAHBnahb.orgVisit source
- Reference 11EVICTIONLABevictionlab.orgVisit source
- Reference 12CBREcbre.usVisit source
- Reference 13EIAeia.govVisit source
- Reference 14FURMANCENTERfurmancenter.orgVisit source
- Reference 15BLSbls.govVisit source
- Reference 16APARTMENTLISTapartmentlist.comVisit source
- Reference 17IIIiii.orgVisit source
- Reference 18FREDDIEMACfreddiemac.comVisit source
- Reference 19EPIepi.orgVisit source
- Reference 20HUDhud.govVisit source
- Reference 21NOVOCOnovoco.comVisit source
- Reference 22HUDEXCHANGEhudexchange.infoVisit source
- Reference 23LOCALHOUSINGSOLUTIONSlocalhousingsolutions.orgVisit source
- Reference 24RDrd.usda.govVisit source
- Reference 25TREASURYtreasury.govVisit source
- Reference 26FHFAfhfa.govVisit source
- Reference 27TRANSPORTATIONtransportation.govVisit source
- Reference 28HOMEhome.treasury.govVisit source
- Reference 29LINCOLNINSTlincolninst.eduVisit source
- Reference 30PEWRESEARCHpewresearch.orgVisit source
- Reference 31CHILDWELFAREchildwelfare.govVisit source
- Reference 32TICASticas.orgVisit source
- Reference 33NATIONALHOMELESSnationalhomeless.orgVisit source
- Reference 34ALZalz.orgVisit source
- Reference 35DOLdol.govVisit source
- Reference 36PRISONPOLICYprisonpolicy.orgVisit source
- Reference 37NARnar.realtorVisit source
- Reference 38MCKINSEYmckinsey.comVisit source
- Reference 39PROXIMITYONEproximityone.comVisit source
- Reference 40PROPTECHBUZZproptechbuzz.comVisit source
- Reference 41CERULLIcerulli.comVisit source
- Reference 42ENDHOMELESSNESSendhomelessness.orgVisit source
- Reference 43DELOITTEdeloitte.comVisit source
- Reference 44AARPaarp.orgVisit source
- Reference 45CBREcbre.comVisit source
- Reference 46GRESBgresb.comVisit source