The cost of renting a home in the United States has gone up sharply in recent years. Millions of families now spend more than they can afford just to keep a roof over their heads. While the federal government has pulled back on some housing programs, cities and states are starting to fill that gap — and that could make a real difference for renters and low-income families across the country.
Here's a breakdown of what's happening, why it matters, and what it means if you're looking for affordable housing.
The Problem: Building Affordable Housing Is Getting Harder
Most affordable housing projects — the kind where rent is kept low for people with lower incomes — require a mix of funding from different sources. Builders can't make these projects work on rent alone. They need grants, low-interest loans, and tax breaks to make the numbers add up.
For decades, much of that money came from the federal government. Programs like the Low-Income Housing Tax Credit (LIHTC), run through the U.S. Department of Housing and Urban Development (HUD), have helped fund millions of affordable homes. But federal funding has become less reliable — and in some cases, is being cut.
According to industry experts who spoke at a recent affordable housing conference in Washington, D.C., the federal government is now focused more on deregulation (removing rules) than on direct spending. At the same time, President Trump's proposed 2027 budget would cut HUD's funding by more than $10 billion. That includes eliminating programs like the Community Development Block Grant (CDBG) and the HOME Investment Partnerships Program, both of which help build and preserve affordable homes.
What Cities and States Are Doing Instead
With less federal money on the table, many cities and states are stepping up with their own funding. This is a big shift — and it's happening all over the country.
According to the Center on Budget and Policy Priorities, a nonpartisan research group, at least 34 states and Washington, D.C., have created new or expanded investments to tackle affordable housing or homelessness in their most recently approved budgets. At least 27 of those states are using money for things like capital grants, low-cost loans, housing tax credits, and deposits into State Affordable Housing Trust Funds.
Here are some of the tools being used:
Local funding in project budgets. Builders are relying more and more on money from counties and cities to close the funding gap on affordable housing projects. Where federal dollars once covered more of the cost, local governments are now being asked to put in a larger share.
Tax abatements. A tax abatement means the government agrees to reduce or waive property taxes for a period of time. This helps lower the cost of owning and operating a building, which makes it possible to charge lower rents. One example: the city of Alexandria, Virginia, offered its very first 25-year tax abatement for housing to help turn a long-vacant office building into 377 fully affordable apartments. This kind of creative deal is becoming more common.
Tax exemptions. Some cities are also offering deep real estate tax exemptions — meaning a developer pays little or no property tax — to make affordable projects financially possible.
New York City's Big Announcement. Just recently, New York City's mayor unveiled a sweeping plan to create 200,000 new housing units and preserve 200,000 more over the next decade. The city is proposing to back that plan with $22 billion in investment over the next five years. That is a massive commitment from a single city, and it shows just how seriously local governments are taking the housing crisis.
Why This Matters for Renters
You might be wondering: does any of this actually help me find an affordable place to live?
The answer is: it can, but it takes time.
When cities and states put money into affordable housing, it helps developers build more units where rent is capped at a level people with lower incomes can afford. Many of these homes are rented through programs like Section 8 (also called the Housing Choice Voucher Program), which helps low-income families, seniors, and people with disabilities pay for housing in the private market.
The National Low Income Housing Coalition estimates that there is a shortage of millions of affordable and available rental homes for the lowest-income renters in the U.S. Local and state investment helps chip away at that shortage — one project at a time.
If you're currently on a waiting list for a housing voucher or looking for an affordable unit, these new investments may not help you tomorrow. But they're building the housing stock that future renters — and maybe you — will need.
What About the Federal Government?
The federal government is not completely stepping back from housing. HUD Deputy Secretary Andrew Hughes recently said the administration's main focus is deregulation — meaning reducing the rules that make it harder and more expensive to build housing. The idea is that if you remove red tape, more builders will build more homes, including affordable ones.
Some housing experts agree that cutting unnecessary regulations can help. But others point out that deregulation alone isn't enough. Priya Jayachandran, president and CEO of the National Housing Trust, put it plainly: deregulation is helpful, but direct investment — grants, subsidies, loans — is what actually gets affordable homes built.
"If I had to pick, would I prefer deregulation or subsidy and investment? I would take subsidy and investment any day of the week," she said.
The National Housing Trust works to preserve and expand affordable rental housing across the country, and their perspective reflects what many housing advocates believe: the government needs to put real dollars behind affordable housing, not just remove obstacles.
The Takeaway: Local Governments Are Becoming More Important
The big shift happening right now is that cities and states — not just Washington — are becoming the main drivers of affordable housing policy. That means:
- The amount of affordable housing in your area depends more than ever on where you live and what your local leaders decide to do.
- Local housing trust funds, tax abatements, and city investment plans are becoming critical tools.
- Advocates, renters, and community members have more power than ever to push their city or state officials to act.
If you want to find out what your local government is doing on housing, you can check your city or county's housing department website, or visit HUD's resource page for renters.
Stay Informed
The affordable housing landscape is changing fast. For a full look at the latest news and updates affecting renters and voucher holders, check out our own roundup: This Week in Affordable Housing.
Whether you're currently searching for housing, on a waiting list, or just trying to understand your options, staying informed is one of the best things you can do. And we're here to help.
Looking for affordable housing in your area? Visit Section8Search.org to search listings and learn more about housing assistance programs near you.
Navigating the Section 8 housing process can feel overwhelming, and that's where Section 8 Search comes in. We're more than just a listing website; we're a dedicated resource designed to make finding housing under the Housing Choice Voucher Program straightforward and stress-free. Our platform offers user-friendly tools to explore listings and waiting list statuses nationwide, all built on official HUD data. We're also passionate about providing clear, helpful information and guidance, empowering you with the knowledge you need to understand eligibility, complete your application, and confidently navigate your housing journey.
