Affordable housing net operating income grew faster than its market-rate counterpart for the second year in a row
Highlights:
- Net operating income grew year-over-year on average by 8.7% at affordable properties.
- Multifamily NOI increased by just 2.2% during the same period.
- HUD allowed maximum rent increases of more than 6% on average at affordable properties.
- Insurance costs plateaued, up just 0.2% year-over-year per unit at income-restricted communities.
Net operating income continues to thrive at affordable properties
Net operating income at fully affordable multifamily properties grew at a faster rate than their traditional counterparts in 2025, according to Yardi Matrix Expert data. NOI growth at income-restricted properties stood on average at 8.7% in 2025, while the figure rose only by 2.2% across market-rate multifamily properties. Notably, affordable assets also outperformed traditional properties in 2024.
Affordable housing NOI growth showed strong regional variance, with strong gains across the Northeast and Southeast and more measured increases in the Southwest. The Northeast had an average growth of 12.9%, mostly driven by expensive metros such as New York City, Boston or Philadelphia.
At the other end of the growth chart were Southwest markets, where market-rate properties posed great competition to affordable assets. This region had an average NOI growth rate of 2.5% in 2025; however, a few markets were way below that benchmark, such as Austin (-18.9%) and Dallas (-2.2%). Struggling affordable properties aren’t found just across the Southwest. In fact, a November study from Cohn Reznick revealed that one in four LIHTC properties reported operating deficits.
Higher HUD allowable rents and tempering insurance premiums support affordable NOI
Such struggling properties might have occupancy issues or rent-collecting difficulties, which reduce gross income. Yet, that was not the rule in 2025, with gross income at affordable properties rising by 5.7% on average. HUD’s average allowable maximum rent increases were instrumental in the gross gains across income-restricted communities, as the department allowed for more than 6.0% growth on average at affordable properties.
Meanwhile, expenses grew by 3.3% on average across fully affordable communities, representing a substantially tamer growth rate compared to the peaks of 2022 and 2023 when expenditures grew by 7.8% annually. Insurance costs used to drive this growth, as it surged 126.2% between 2020 and 2025, but its surge has plateaued last year, only ticking up 0.2% per unit.
Read the full Yardi Matrix Affordable Housing Market Report: February 2026.
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