While set to decline in 2026, affordable completions still double any pre-pandemic year
Highlights:
- Fully affordable deliveries amounted to 91,841 units in 2025.
- This year, Yardi Matrix expects 90,476 completions inside fully income-restricted properties.
- Only 81,230 units inside fully affordable projects entered the pipeline in 2025, down from 85,662 apartments in 2024 and 94,873 units in 2023.
- New affordable housing starts declined further with a 16.9% year-over-year drop in the final quarter of 2025 and a decline of 19.9% in the first quarter of 2026.
The downward affordable delivery trend is expected to go beyond 2026
Current market conditions pose headwinds for affordable housing development with fewer completions forecasted, even amid increased funding and renewed legislative efforts aimed at incentivizing construction. Fully income-restricted completions clocked in at 91,841 last year, below the record of 99,558 units registered in 2024 but still nearly twice as high as the deliveries registered during any year before 2020. Yardi Matrix expects 90,476 completions in 2026 and 70,977 in 2027.
While the overall national affordable housing development model predicts a decline, the story is more nuanced at a market level, where metros find themselves at different stages across cycles. For example, Austin appears to have passed its income-restricted completion crest, expecting just 3,955 deliveries in 2026, 44% below last year’s figure of 7,059 completions. Atlanta is on track to expand its affordable inventory by approximately 4,000 units annually through 2028, while developers brought online 8,000 units each year between 2023 and 2025.
Other Sun Belt markets continue to expand their income-restricted inventories, such as Houston (53.5% year-over-year forecasted increase in 2026), Denver (46.4%) and Phoenix (39.2%). Florida Markets lead in terms of projected completion growth rates, with Tampa taking first place (135.8%), followed by Orlando (73.3%). Looking ahead at a medium-term window, gateway markets present a more balanced profile with solid increases between 2026 and 2028, including New York City (31.1% increase in affordable stock) and Los Angeles (21.9%).
Even fewer affordable housing units enter the pipeline
Shrinking completion count is driven by a tapering of new affordable projects. Starts declined from the peak of 94,873 recorded in 2023 to just 85,662 units in 2024 and then to 81,230 units last year. High construction costs, elevated interest rates and depreciating tax credit pricing were among the factors that altered affordable housing development. This restrictive environment has heightened in intensity lately, with starts declining 16.9% year-over-year in the final quarter of 2025 and dropping 19.9% in the first quarter of 2026.
While government programs aim to incentivize development, the effects of such policies might be slow to translate into new projects because deals are still subject to the same construction timelines and cost headwinds faced by market-rate properties. On top of that, affordable developments must also undergo extensive permitting and compliance processes that may dilute the impact of any increased funding. This environment leads developers to be more selective as fewer projects pan out, while investors rely on specific markets where new projects continue to pencil out, raising exposure to local conditions and project timing.
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