Every Week Counts For Affordable Housing: How Industry Leaders Can Help Amid Federal Program Delays

America’s affordable housing crisis is nearing a breaking point. More than 10 million extremely low-income renter households compete for too few affordable units, creating a shortage of 7.1 million homes. Federal rental assistance programs help families, but many more remain on waiting lists or in precarious situations.

At the time of writing, in this environment, every preserved or created unit matters, while every delay in affordable housing programs puts vulnerable communities further at risk.

Time isn’t just money in affordable housing; it’s community stability. And amid the ongoing federal government shutdown, every delay ripples through the housing ecosystem. With HUD operating at reduced capacity and key programs stalled, developers face mounting uncertainty. Approvals are frozen, inspections are delayed and Low-Income Housing Tax Credit (LIHTC) transactions sit idle.

Each passing week drives up costs and erodes confidence. Construction bids expire, financing terms tighten and timelines stretch. For mission-driven operators, these aren’t just administrative setbacks; they have real human consequences. Every day of inaction means families wait longer for safe, stable homes and communities are left in limbo as repairs stall. It also means that resident benefits are delayed, making it difficult for them to pay their rent and forcing residents to make difficult decisions.

When federal programs pause, progress halts, and in affordable housing, lost time is a luxury people can't afford.

The Cost Of Inaction

Inaction amplifies the financial strain on preservation projects and the people who live in them. A delay of just 30 days can mean rebidding contracts at higher rates or losing locked-in pricing required for feasibility.

At the same time, lenders and investors grow cautious. Investors may hesitate to close without clarity from HUD or the Treasury on subsidies, and rate locks can expire. Each idle week adds soft costs (e.g., legal fees, consultant extensions, interest carry) and can threaten compliance with state housing deadlines.

Federal programs like HUD’s Rental Assistance Demonstration (RAD), Section 8 contract renewals and HOME or CDBG allocations are lifelines for preservation work. When they pause due to shutdowns, backlogs or political gridlock, developers lose financial predictability. Costs can rise by thousands of dollars per unit before construction even begins, forcing difficult choices: scaling back scopes, deferring improvements or walking away entirely.

The Ripple Effects On Communities

The impact of federal inaction reverberates beyond budgets. Affordable housing preservation is about more than buildings; it’s about keeping families rooted and neighborhoods stable. When projects stall, that stability begins to crack.

Seniors on fixed incomes wonder if they will need to relocate. Families question whether their housing will be affected.

Residents lose confidence not only in developers but in the broader system, including HUD, state housing agencies and public-private partnerships. Even when developers communicate transparently, the optics can overshadow intent. Once that trust is lost, it’s difficult to rebuild, which strains local relationships and weakens the partnerships essential for long-term affordability.

When federal programs pause, it’s not just progress that’s frozen; it’s faith in the process. Rebuilding trust requires consistent action, clear communication and recognition that each delay carries a human cost no budget can quantify.

What Developers, Owners And Management Companies Can Do Right Now

While only Congress can control federal timelines, we can mitigate the fallout. A few key strategies stand out:

1. Be proactive with financing partners. Request the use of reserve accounts, secondary financing or short-term bridge loans should subsidy or other required funding be delayed.

2. Strengthen communication. Transparency builds confidence. Regular updates to investors, partners, residents and lenders (even when there’s no new information) demonstrate discipline and reliability. During prior shutdowns, developers who kept investors informed often preserved commitments, while others faced re-pricing or lost deals.

3. Advance what you can control. Even when approvals are stalled, other work can continue. Developers can finalize environmental reviews, design plans, and community engagement to stay “shovel-ready.” Progress in these areas allows projects to move quickly once federal approvals resume, saving both time and money.

4. Leverage state and local partnerships. State and local housing agencies can often bridge federal gaps through interim financing or expedited reviews. Early collaboration with these partners can make the difference between stalling and staying on track.

5. Advocate collectively. Developers, owners, residents, and operators are strongest when they speak with one voice. Coalitions like the National Housing & Rehabilitation Association and the Affordable Housing Tax Credit Coalition have successfully pushed for program stability during past crises. (Disclosure: I am on the NLHA board as vice president.) Continued advocacy helps keep affordable housing a bipartisan priority and keeps millions of families from becoming collateral damage in political standoffs.

The Path Forward

Federal program delays are an unavoidable reality, but passivity can’t be the response. I think the best way to push forward is to illuminate the issues inaction causes and the very real effect it has on the most vulnerable of our populations.

Every week truly counts. And for those committed to preserving and creating affordable housing, the cost of inaction is simply too high to ignore.

In California, the cost of housing is among the highest in the country, making affordable housing essential for many working families. The Area Median Income (AMI) is used to determine eligibility for many publicly-funded affordable housing programs, particularly through the Low-Income Housing Tax Credit (LIHTC).  

According to the Department of Housing and Urban Development (HUD), AMI is the midpoint of a region's income distribution, meaning that half of the households in that area earn more than the median and half earn less. AMI is calculated each year by HUD for metropolitan areas and regions in the United States. So, the demographics and AMI qualifications vary across the country.  

Below is a breakdown and overview of AMI qualification levels in California.  

• 50% of AMI: In California, renters earning 50% of the AMI often include low-wage workers in roles such as food service, retail, or hospitality. In a high-cost region like Los Angeles, this might equate to individuals earning around $40,000 annually or families of four with a household income of approximately $63,000. In San Francisco, these numbers change to $52,000 and almost $75,000, respectively. Workers at this level may include positions such as cashiers, restaurant staff, and home health aides.
  

• 60% of AMI: Households at 60% of the AMI include those earning a little more, but still facing housing cost burdens in competitive markets. For example, in San Diego, a single individual may qualify with an annual income of about $63,000, while a family of four might earn up to $90,000. Occupations at this income level might include teaching assistants, entry-level healthcare professionals, or office support staff.
  

• 80% of AMI: At 80% of the AMI in California communities, households may include individuals and families who are not eligible for market-rate rents but earn above typical LIHTC eligibility thresholds. In areas like Santa Clara County (which is home to San Jose), a household could earn between $103,000 to $147,000 depending on family size. Renters at this level may include public sector workers, such as school teachers, bus drivers, or police officers in junior roles, as well as early-career professionals in tech or finance industries.
  

• 100% and Above AMI: Although not typically part of affordable housing programs, understanding renters at 100% or above AMI helps illustrate the income disparities in California’s housing market. Renters at this level generally earn enough to afford market-rate housing but may still struggle with housing costs in extremely high-cost areas. Households in this category might include young professionals, mid-level managers, or dual-income households.

Understanding who qualifies for affordable housing helps tailor developments to meet the needs of local communities, ensuring a range of affordable housing options that reflect income diversity across the state. The diverse workforce in California, combined with the high cost of living, makes affordable housing at various AMI levels critical. As a result of these cost burdens, the need for housing support extends beyond traditional low-income families and into individuals and families that work in professions such as government, service and entry-level professionals. Expanding access to affordable units ensures that the entirety of the state’s workforce has the stability needed to thrive in the high-cost environment of California.

By: Belinda Lee, Director - Development

The Low-Income Housing Tax Credit (LIHTC) program has been an essential component of affordable housing finance since it was enacted as a part of the Tax Reform Act of 1986. Originally created as a tool to encourage public-private partnerships to increase the low-income housing stock, it has been modified several times. Since inception, it has supported the generation of more than 3.5 million affordable housing units nationwide.  

Through the LIHTC program, state and local LIHTC-allocating agencies have the authority to allocate approximately $10 billion in federal funds each year to issue tax credits for the acquisition, rehabilitation, or new construction of rental housing targeted to lower-income households. Generally, the state and local agencies award LIHTC credits to private affordable housing developers through a competitive process. Then, developers typically sell the credits to private investors to obtain funding.  

Only rental properties (e.g., apartment buildings, single-family homes, smaller multi-unit buildings) qualify for LIHTC. To qualify, the owners or developers of the affordable housing project must meet certain income tests for tenants and rent. Projects must pass one of the income tests below and agree to comply with these parameters for a minimum of 15 years (though some state agencies may require compliance for 30 years):

• At least 20 percent of the project’s units are occupied by tenants with an income of 50 percent or less of area median income (AMI) adjusted for family size.

• At least 40 percent of the units are occupied by tenants with an income of 60 percent or less of AMI.

• At least 40 percent of the units are occupied by tenants with income averaging no more than 60 percent of AMI, and no units are occupied by tenants with income greater than 80 percent of AMI.

LIHTC offers investors a dollar-for-dollar reduction in their federal tax liability in return for providing capital to support the development of affordable rental housing. This investment helps subsidize the construction of low-income housing, enabling the units to be rented at rates below the market value.

Investors can claim LIHTC credits, which are calculated by multiplying a credit percentage by the project's qualified basis, over a 10-year period once the affordable housing project is available for tenants. The tax credit is distributed pro rata over this period and can be applied to the construction of new rental buildings or the renovation of existing ones. LIHTC is designed to cover 30 percent or 70 percent of the costs for low-income units in a project. The 30 percent subsidy, known as the automatic 4 percent tax credit, applies to new construction with additional subsidies or the acquisition of existing buildings. The 70 percent subsidy, or 9 percent tax credit, supports new construction without any extra federal subsidies.

LIHTC is essential for the funding of affordable housing projects for several reasons:

• Incentive: By incentivizing private developers to invest in low-income housing projects, LIHTC helps to create and preserve affordable rental units for millions of families. The LIHTC program helps meet the growing need for affordable housing while also offering: Community Reinvestment Act (CRA) benefits to financial institutions, economic advantages for investors, tax revenue for state and local governments, and both construction and permanent job opportunities.
  

• Financial feasibility: Without LIHTC subsidies, most affordable housing projects would be financially infeasible. Rental properties eligible for LIHTC often have lower debt service payments and vacancies compared to market-rate housing. These properties usually experience a faster lease-up process.
  

• Housing supply: LIHTC-financed projects increase the housing supply in markets where development would otherwise be challenging.
  

• Rent burdens: The LIHTC program supports low-income families by lowering their rent burdens, allowing them to allocate more income toward other essentials or savings.

By making housing more accessible, LIHTC contributes to improved health and educational outcomes for residents, ultimately promoting social stability and enhancing quality of life. Its ongoing significance in combating housing insecurity makes LIHTC a vital tool for policymakers, developers and communities alike.