US Affordable Housing Crisis Deepens as Low Income Units Sit Vacant
Portland, Oregon, United States | September 8, 2026: The US affordable housing crisis is taking a new turn as thousands of apartments classified as affordable remain vacant while the country's lowest-income renters struggle to find homes they can actually afford. The mismatch highlights a growing gap between the type of affordable housing being developed and the needs of households at the bottom of the income scale.
Millions of Lowest Income Renters Face a Severe Shortage
The US has only about 4 million affordable rental homes for roughly 11 million extremely low-income renter households, according to the National Low Income Housing Coalition.
These households include low-wage workers, seniors and people living on fixed incomes. Around three-quarters spend more than half of their income on rent and utilities, leaving little money for food, transportation and other essential expenses.
Affordable Housing Is Often Built for Higher Income Groups
A major issue is the way affordable housing subsidies are structured. Only about 12% of units financed through the federal Low-Income Housing Tax Credit in 2024 were targeted at households earning up to 30% of area median income.
A much larger share was developed for households earning around 50% of AMI or more. While these homes remain below typical market prices, they can still be unaffordable for households with the lowest incomes.
Austin Shows the Growing Vacancy Problem
Austin illustrates the mismatch particularly clearly. More than 4,500 units classified as affordable are vacant, representing a vacancy rate of nearly 16%, compared with a healthy overall housing vacancy level of around 5%.
Some affordable developments aimed at households earning 60% of AMI are increasingly competing with newly built market-rate apartments. When the rent difference is relatively small, some renters prefer market-rate housing because applications are generally faster and involve fewer income-verification requirements.
Portland and Denver Face Similar Challenges
The problem is not limited to Austin. Denver has reported vacancy rates of around 13% for 60% AMI units financed through the federal tax-credit programme and about 21% for 80% AMI units.
In Portland, more than 1,700 affordable units are vacant, with many targeted at households earning around 60% of AMI. At the same time, the city continues to face a shortage of housing for its lowest-income residents.
This creates an unusual situation where housing labelled affordable can remain empty while people who need the greatest assistance remain on waiting lists or face homelessness.
Housing Vouchers Could Help Close the Gap
Housing vouchers can help extremely low-income households afford homes that would otherwise be beyond their reach. However, experts estimate that only around one in four eligible families receives a voucher, with waiting lists in some areas lasting years.
Affordable housing developers also argue that additional subsidies are necessary to make extremely low-income units financially viable. Construction, financing and operating expenses can leave little room for developers to offer rents affordable to households earning only 30% of AMI.
Cities Are Beginning to Shift Their Housing Priorities
Some local governments are responding by placing greater emphasis on housing for the poorest residents. Austin, for example, has begun giving greater preference to proposals that include 30% AMI units.
The city had targeted 20,000 homes for extremely low-income households between 2018 and 2027, but only 543 had been completed by 2024. By comparison, the city's target for households earning 60% to 80% of AMI had been fully met.
What the US Housing Market Needs Next
The growing vacancy problem suggests that simply increasing the number of units classified as affordable may not be enough. Housing programmes also need to match actual household incomes and local affordability levels.
For the US property market, better alignment between subsidies, rents and household incomes could help reduce vacancies while expanding housing access for vulnerable renters. Without that shift, cities could continue to see affordable units sitting empty even as homelessness and housing cost burdens remain high.