Read the latest Yardi Matrix Affordable Housing Market Report.
Explore the layers of affordable housing capital stacks with data from the latest Yardi Matrix report.
Report highlights:
- Affordable housing entities utilized more than 250 different affordable housing programs.
- Federal initiatives were most common, with 11,221 properties utilizing such funds.
- Tax-exempt bonds were the go-to federal program, found in the capital stack of 3,288 properties.
- State-wide initiatives clocked in at roughly 100, subsidizing more than 2,000 properties.
Taking stock of the affordable housing initiatives
In response to the imbalance between income growth and housing cost increases, government entities are addressing the need for affordable housing through various subsidies. More than 250 such programs, including federal, state and local initiatives, were found within the capital stacks of 26,000 fully affordable properties inside Yardi Matrix’s database. These government contributions may manifest in various ways, such as tax credits and deferrals, low-cost financing, grants and density bonuses, as well as direct renter subsidies. Companies can access the benefits in exchange for limiting rents and catering to certain demographics, such as low-income households, the elderly and the poor, among others.
The federal government was the number one source of funds for affordable housing endeavors, with 11,221 communities using such capital. One of the most prominent initiatives—having funded 3,288 properties—was the tax-exempt bonds issued for projects serving low-income residents. Developments meeting the requirements for this program automatically qualify for 4% LIHTC, which is designed to cover 30% of construction costs over a 10-year period. Other subsidies involve the U.S. Department of Housing and Urban Development, with its annual grants to public housing authorities and Section 8 vouchers, aiming to assist tenants in paying a portion of their rents.
At a state level, nearly 100 different affordable housing subsidies could be found within the capital stack of more than 2,000 properties. California led across all states, having 22 programs in use by 974 communities. Some of the Golden State’s most-used incentives are meant to spur development, such as the Density Bonus, which helps in bypassing local zoning limits, as well as the Multifamily Housing Program that provides construction debt. Florida ranked second with five initiatives, including the State Apartment Incentive Loan. SAIL also addresses the housing shortage by providing low-interest debt that may cover up to 25% of development costs.
Policy and regulation changes
A tax and budget bill making its way through the chambers of Congress may impact the affordable housing subsidy landscape. Its provisions would see an increase in 9% LIHTC allocations and reduce the requirements for attaining tax-exempt bonds, as well as a growth in the funds earmarked for Native American communities and a renewal of the Opportunity Zone program. However, the downside is that the bill also proposes slashes to Section 8 funds and various affordable housing debt programs, in addition to a reduction in HUD’s staff.
Policy changes aren’t the sole pressing matter on the minds of affordable housing developers. The attainment of subsidies can become a complex matter involving laborious regulations, which may expand a project’s timeline and incur additional costs. However, certain proposals aim to streamline the process by simplifying compliance and reporting requirements, as well as aligning LIHTC regulations with other federal programs.
Read the full Yardi Matrix Affordable Housing Market Report: July 2025.
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