Federal Policy Changes Favor Affordable Housing Development

Federal Policy Changes Favor Affordable Housing Development
News| February 4, 2026| Paul Bubny
Apartment Buildings

As the pipeline of under-construction apartments continues to diminish, affordable and partially affordable properties are comprising an increasingly larger share of the overall new-supply mix and supporting new development activity, says Yardi Matrix. Annual completions for market-rate apartments will decline to pre-pandemic levels by 2028, while affordable and partially affordable new supply will remain near 2024-level highs.

The firm points to 2025 policy changes that have positioned geographically targeted federal tax incentives at the center of the nation’s affordable housing strategy. These measures include a
long-term extension of the Opportunity Zones program, a 12% expansion of Low-Income Housing Tax Credit (LIHTC) allocations, improvements in private activity bond access for rehabilitation programs and broader eligibility for the 30% basis boost in Difficult Development Areas.

“The long-term effect depends on interest rate conditions, capital availability, construction labor constraints and local entitlement environments,” according to Yardi Matrix. “Even so, the combined weight of federal and state support positions the multifamily sector for a decade of elevated activity.”

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