The Growing Affordable Housing Crisis: 7.1 Million Unit Shortage

In March 2025, the National Low Income Housing Coalition (NLIHC) released its annual report, "The Gap: A Shortage of Affordable Homes," revealing a national deficit of 7.1 million affordable and available rental homes for extremely low-income (ELI) renters. This equates to only 35 affordable homes for every 100 ELI renter households nationwide. The report underscores that no state or major metropolitan area has an adequate supply of affordable housing for ELI renters. For instance, Nevada faces the most severe shortage, with just 17 affordable homes per 100 ELI renter households, while North Dakota has the least severe shortage at 62 homes per 100 households. Additionally, 75% of ELI renters are severely cost-burdened, spending more than half of their income on rent. The NLIHC emphasizes the need for increased federal investments in affordable housing programs to address this crisis.

The shortage of affordable housing has profound societal implications. With 75% of ELI renters spending more than half of their income on rent, these households have limited resources for other essentials such as food, healthcare, and education. This financial strain can lead to increased rates of homelessness, as evidenced by the 18% rise in homelessness from 2023 to 2024, reaching over 770,000 individuals—the highest number ever recorded. The crisis disproportionately affects communities of color; in 2023, 57% of Black renter households and 53% of Hispanic renter households were cost-burdened, compared to 46% of white renters.

The affordable housing crisis is exacerbated by economic factors such as rising construction costs and stagnant wages. Between 2023 and 2024, the average construction value per newly authorized housing unit increased by 7.6%, reaching $260,229. Simultaneously, wages for low-income workers have remained relatively stagnant, making it increasingly difficult for them to afford rising rents. Politically, the crisis has been met with proposals that could further strain low-income renters. For example, the Trump administration proposed a two-year limit on federal rental assistance, potentially affecting 1.4 million of the nation's poorest renters.

While the national trend indicates a slowdown in apartment construction, some regions are defying this pattern. Kansas City, for instance, continues to experience strong momentum in apartment construction, particularly in luxury units and suburban expansion. In 2024 alone, over 4,000 new apartments became available in the area. However, this growth has primarily been in higher-end housing, with limited impact on the availability of affordable units.

The current shortage is part of a longstanding trend. In 2013, a report highlighted that 11.2 million Americans were spending over 50% of their income on rent, with projections estimating this number could rise to 14.8 million by 2025. The shortage of affordable housing units was around 4 million at that time, indicating a worsening situation over the past decade.

Addressing the affordable housing crisis requires a multifaceted approach:

• Increased Federal Investment: Substantial funding for programs like the national Housing Trust Fund, Housing Choice Vouchers, and public housing is essential to bridge the gap in affordable housing.

• Policy Reforms: Reevaluating policies that may inadvertently exacerbate the crisis, such as proposed time limits on rental assistance, is crucial to ensure they do not harm vulnerable populations.

• Encouraging Affordable Development: Incentivizing the construction of affordable housing units through tax credits, subsidies, and streamlined permitting processes can help increase supply.

• Addressing Wage Stagnation: Implementing policies that promote wage growth for low-income workers can enhance their ability to afford housing.

By delving into these aspects, a comprehensive article can shed light on the multifaceted nature of the affordable housing crisis and potential pathways forward.