The state of affordable housing construction in 2025
By Quinn Purcell, Managing Editor
Completions of affordable housing properties are set to reach a multi-year high of 78,000 in 2025, according to the latest National Affordable Housing Report by Yardi Matrix.
Yardi Matrix's latest report on the affordable housing market examines historical and projected development in the U.S. and major markets. The report explores the factors driving affordable property development, as well as the decline in new starts despite record-high demand.
Affordable Multifamily Housing Deliveries Set to Peak in 2025
The U.S. faces a shortage of affordable housing units, estimated at upwards of seven million, according to the report. While demand for affordable housing won't stop growing, deliveries will.
Affordable housing starts fell by 28.7% to 66,000 in 2024, the lowest number since pandemic-era 2020. Although, similarly, the fall of market-rate apartments fell even faster—a 47% drop to 208,000 in 2024 (the lowest it's been since 2013).
The result of this is that the share of affordable housing construction is increasing for all multifamily development activity. In 2024, fully affordable units comprised nearly 19% of multifamily starts, up from 14% in 2023.
This shows the growing importance of affordable housing in the U.S. Another factor that may see change in 2025 is the importance of federal tax programs like the Low-Income Housing Tax Credit (LIHTC). It's estimated that one-quarter of apartments built in the U.S. between 2000 and 2019 were supported by LIHTCs.
With a new administration taking office, the potential for change is "enormous," says the report. "Developers can expect to retain favorable tax treatment for construction projects and lower corporate taxes."
Overall, the total amount of multifamily starts fell 46% in 2024 to 353,000 units, from 652,000 units in 2023.
Affordable Housing in 2025 by Metro
Affordable housing is not the same across the country, however. Matrix finds that California, Florida, and Texas lead the nation in the development of new affordable housing. California has 166,000 fully affordable units, followed by Florida (6,688), Texas (4,537), New York (2,480), and North Carolina (2,122).
In the private sector, 14 different metros have at least 1,000 fully affordable units that are under construction. This is led by Austin (2,717 units), Miami (2,687), Los Angeles (2,196), Salt Lake City (1,861), Sacramento (1,613), San Diego (1,479), and San Francisco (1,462).
To read the full report, visit Yardi Matrix here.