**Federal Policy Changes Boost Affordable Housing Development**
As the number of under-construction apartments continues to shrink, affordable and partially affordable housing is becoming a larger share of new multifamily supply. According to Yardi Matrix, this segment is not only filling the gap but also supporting continued development activity in the sector. Projections indicate that market-rate apartment completions will fall to pre-pandemic levels by 2028. In contrast, affordable and partially affordable units are expected to maintain 2024-level highs over the next several years.
The momentum behind affordable housing is being reinforced by policy changes slated for implementation in 2025. These changes place geographically targeted federal tax incentives at the core of the nation’s affordable housing strategy. Among these measures are a long-term extension of the Opportunity Zones program, a 12% increase in Low-Income Housing Tax Credit (LIHTC) allocations, greater access to private activity bonds for rehabilitation efforts, and broader eligibility for the 30% basis boost in designated Difficult Development Areas.
“The long-term effect depends on interest rate conditions, capital availability, construction labor constraints, and local entitlement environments,” Yardi Matrix noted. “Even so, the combined weight of federal and state support positions the multifamily sector for a decade of elevated activity.”
These developments signal a strong federal commitment to bolstering affordable housing and could set the stage for a new era of sustained multifamily growth.
