Jeff Adler: More Affordable Housing Than Ever — and More Competition Than Expected
AHIC Spring Meeting | Scottsdale, AZ | April 21-23, 2026
Jeff Adler, Vice President at Yardi Matrix, opened the 2026 AHIC Spring Meeting in Scottsdale with a presentation on the state of the U.S. affordable housing market.
Two themes ran throughout: affordable housing is being built at a higher share of total multifamily supply than at any point in the program's history, and that new supply is entering markets where competition from conventional multifamily is intense enough to produce operating conditions, including concessions, the sector has not previously experienced.
A third thread connected both: the availability of granular submarket data is changing what rigorous underwriting looks like, and the standard benchmarks long used to underwrite LIHTC deals may not reflect what is actually happening on the ground in many markets.
The Persistent Housing Shortage
Current housing starts sit at roughly 10 per 1,000 households, well below the pre-pandemic average of approximately 19. Every state in the country is underproducing relative to need. Even high-growth states like Texas and Florida have underbuilt relative to historical norms.
The supply response has been highly uneven geographically, concentrated in a group of Sunbelt cities while much of the country has seen little new construction. Multifamily turnover is at a 40-year low, down roughly 15 percentage points from pre-COVID levels, which is keeping existing renters in place and muting what might otherwise be a more severe market correction.
Meanwhile, rents for lower-income renters have grown on a cumulative basis faster than area median income since 2007, pushing rent-to-income ratios for renter-by-necessity households above 31% nationally, a level that reflects sustained financial pressure at the lower end of the income scale.
More Affordable Supply, More Competition
Fully affordable units now represent approximately 17–18% of total multifamily completions, up from around 11% in 2019, the highest share in the history of the LIHTC program. That share is expected to remain elevated through 2028 even as overall market-rate completions moderate. Fully affordable completions peaked at approximately 99,000 units in 2024.
That growth in affordable supply is coinciding with a broader multifamily supply wave, particularly in Sunbelt markets, that has brought conventional rents down sharply in some submarkets. The result is a level of direct competition between affordable and market-rate properties that the sector has not previously encountered at this scale.
Yardi Matrix measures this dynamic through an AMI percent metric, which identifies the income level at which a property's rents are "affordable" under the standard 30%-of-income threshold. By comparing this metric across affordable and conventional properties within the same submarket, the data shows where the two sectors are effectively competing for the same renter pool.
In markets like Raleigh and Austin, nearly all conventional inventory falls within competitive range of fully affordable LIHTC properties on a rent basis. In Austin specifically, affordable housing occupancy is running below conventional occupancy, with affordable NOI down 15.4% year-over-year compared to a 7.7% decline for conventional properties over the same period.
The stress is also showing up in a metric that has no real precedent in the affordable housing sector: concessions. Approximately 7% of fully affordable properties are now offering concessions. Affordable properties have historically operated with waitlists and no need to compete for tenants. Any concession activity in the sector is notable; 7% is, by Adler's account, unprecedented.
The picture is not uniform. In tighter coastal markets with little new supply, affordable properties are performing more in line with historical norms. Miami's fully affordable properties are running at roughly 98% occupancy, above conventional levels, with NOI growth of approximately 11% year-over-year. Boston and San Diego show similarly low levels of rent competition between affordable and conventional stock.
Adler presented submarket-level mapping for Denver, Austin, Sacramento, Boston, Los Angeles, and Nashville to illustrate that competitive exposure can vary significantly by neighborhood within a single metro.
Program Complexity and Deal Costs
The affordable housing sector is now tracked across more than 900 separate federal, state, and local programs — each with its own eligibility requirements, compliance obligations, and administrative overhead. The LIHTC program remains the foundation, but layering additional programs on top of a tax credit deal to fill financing gaps is increasingly common, and each additional layer adds meaningful cost.
In California, where deals routinely involve seven or eight funding sources, the cost implications are particularly pronounced. Adler estimated that each additional program layer can add tens of thousands of dollars in per-unit costs.
The proliferation of programs reflects genuine efforts to solve affordability problems, but the cumulative effect is a financing structure of substantial complexity that drives up costs, extends timelines, and reduces transparency — for developers, investors, and state housing agencies alike.
Preservation: A Large Wave Approaching
Through 2039, compliance periods are projected to expire for more than one million LIHTC units nationally. An additional 515,000 units will reach the end of their extended use periods over that same window. In the near term — through 2028 — Texas, Virginia, and Florida have the highest absolute counts of units with expiring extended use periods, while West Virginia, Delaware, and Virginia lead on a percentage-of-total-LIHTC-units basis.
The expiration of extended use periods in high-cost, supply-constrained markets creates particular pressure. In expensive neighborhoods where market-rate rents are substantially above LIHTC rent limits, the incentive to exit the affordability program at expiration is strong.
Adler framed this as a capital allocation question for both investors and state housing agencies: where is preservation capital most needed, and where will the market effectively take care of itself? The data to answer that question at a granular level now exists, though it has not historically been assembled or applied in a systematic way.
Property Performance: Regional Divergence
Nationally, income for fully affordable properties has grown 38% since 2019, while total operating expenses have grown 43% over the same period. NOI remains positive nationally, with year-over-year growth at 7.8% on a trailing twelve-month basis through early 2026. But the national figure obscures significant regional variation.
The Northeast posted 11.0% NOI growth year-over-year, the Southeast 10.3%, and the Midwest 9.5%, all markets where supply is constrained and affordable properties face limited competition from conventional stock.
The Southwest, by contrast, encompassing markets like Phoenix, Las Vegas, and Denver, saw NOI decline 1.2%, driven by income growth of just 1.0% against expense growth of 2.5%. These are precisely the markets where new conventional supply has been heaviest and where affordable properties are most exposed to direct rent competition.
On the expense side, payroll (25% of total expenses), maintenance (19.5%), and utilities (17.8%) are the three largest cost categories. Insurance costs, after rising as much as 25.6% in a single year, declined 1.0% nationally in 2026, the first year-over-year decrease in the data series, though state-level variation remains significant.
Implications for Underwriting
The granularity now available in market data has direct implications for how LIHTC deals are underwritten. Standard assumptions, vacancy rates, rent growth, and expense ratios applied at the market or regional level, may not adequately capture the conditions a specific property will face.
A project in a Sunbelt submarket where conventional rents have fallen and concessions are being offered faces a fundamentally different operating environment than one in a supply-constrained coastal neighborhood with a waitlist.
The data now exists to make those distinctions at the submarket and neighborhood level, by bedroom type, by AMI tier, by competitive exposure to conventional supply, and by compliance timeline, and the session's implication was that underwriting assumptions should reflect it.
Takeaways for LIHTC Investors
The session's data pointed to a market in transition. Affordable housing is being delivered at a record share of total multifamily supply, but a meaningful portion of that supply is landing in submarkets where conventional rents have fallen far enough to create direct competition, a dynamic showing up in occupancy, NOI, and, for the first time at scale, concessions.
Program complexity continues to drive up deal costs in ways that are not always visible until a project is already in the financing stack. And a large wave of LIHTC compliance and extended use expirations over the next decade will require intentional capital allocation decisions, particularly in high-cost markets where the pressure to exit affordability programs is greatest.
Across all of these dynamics, submarket-level data is increasingly available to inform those decisions, and the standard benchmarks long applied in LIHTC underwriting may not adequately reflect what conditions on the ground actually look like today.
Jeff Adler's full slide deck is available here.