Affordable housing NOI rebounds with solid growth.
Report highlights:
- Average NOI per affordable housing unit stood at $6,886 in August.
- The figure was up 5.6% compared to January.
- Gross income clocked in on average at $15,440 per affordable unit in August.
- Average affordable housing unit expenses were up 31.5% since March 2020, landing at $8,554 in August.
Income growth continues outpacing expenditure increases
As income growth accelerates and the increase in expenses eases, affordable housing net operating incomes continue to trend higher. In August, the average NOI per affordable unit clocked in at $6,886, representing a 5.6% uptick compared to January, according to a Yardi Matrix analysis of 7,018 fully affordable properties across 116 markets. The figure also rose 7.4% last year, putting an end to a sluggish period in 2021 (-0.1%), 2022 (0.8%) and 2023 (2.8%).
The average gross income stood at $15,440 per affordable unit in August, representing a 3.7% growth compared to January. Last year, the figure increased 6.5%, with 2023’s figure standing at 5.7% and 2022’s at 4.6%. Operators were able to increase the revenue stream starting in 2024 as HUD’s formula for the maximum allowable rent, which accounts for variables such as inflation and the area median income, permitted higher rate hikes. Additionally, HUD also modified Section 8’s formula this year, adjusting it to account for wages, benefits, utilities and insurance, which also allowed for more subsidies.
Expenses, on average, were up 2.3% year-to-date through August per affordable unit, landing at $8,554. For reference, this figure rose 35.1%, or $2,223 per unit, between March 2020 and August 2025. Expenditure growth outpaced income increases toward the turn of the decade as insurance, maintenance, administrative and utilities costs ticked up significantly. Insurance alone rose 128% since the first quarter of 2020, although the growth decelerated significantly as premiums only ticked up 0.2% year-to-date through August. Maintenance and repairs exhibited double-digit growth between 2021 and 2023 but similarly slowed down to low single-digit increases in 2024 and 2025.
How expenses, demand and rent collection shift NOI dynamics
NOI did not exhibit the same trajectory across all markets. Of Yardi Matrix’s top 30 metros, 5 witnessed a double-digit growth during the first eight months of 2025, while six saw a negative movement. The metros with strong income growth also benefited from a decline in insurance premiums, such as Raleigh (-7.4%) and Columbus (-13.8%). Markets with negative NOI saw weak revenue growth, in addition to above-trend expense increases. Austin is such a metro, where 25% of multifamily stock debuted in the past 3 years, leading to market-rate rents overlapping with affordable rents, which in turn resulted in higher income-restricted turnover and vacancy. Other metros, such as Seattle, Atlanta and Washington, suffer from uncollected rents, putting downward pressure on incomes.
There’s much to look forward to in 2026, including a boost in affordable housing development and preservation thanks to an increase in LIHTC allocation, as well as strong demand across low- and medium-income households. However, the sector will not be without potential challenges. These issues could include income reduction, as HUD’s formula may not allow for significant rent growth, and other proposed regulations may alter housing voucher programs. Additional problems may arise from inflationary pressure on expenses, with tariffs potentially affecting the price of materials, labor and services. With affordable properties being more exposed to expenses than multifamily, expenses eat up to 55% of revenue across income-restricted properties, versus 44% in traditional multifamily—the sector may run with tighter operating margins.
Read the full Yardi Matrix Affordable Housing Market Report: October 2025.
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