Affordable-Housing Projects Derailed as Developers Struggle for Financing
Originally published on September 3, 2022 by Rebecca Picciotto for the Wall Street Journal.
Affordable-housing developers nationwide are stalling work on new projects, delaying thousands of units from coming to market when the U.S. already has a broad deficit of low-income housing.
Rising interest rates and inflation have made financing for affordable housing more difficult and costly. Supply-chain issues for materials like lumber and appliances have eased a bit recently but haven’t gone away.
These forces can disrupt all types of property development, but they have been especially detrimental to affordable housing. Developers of market-rate apartments can raise rents when they are running low on cash. Affordable-housing developers tend to be limited in their rent increases in order to qualify for federal tax credits.