Affordable Housing

Affordable housing is a broad and complex subject intertwined with many disciplines including finance, economics, politics, and social services, to name a few.


As with any federal program, federal housing programs grew and changed based on the economic, social, cultural, and political circumstances of the times. The programs and agencies that led to the federal department now known as HUD began in the early 1930s with construction and finance programs meant to alleviate some of the housing hardships caused by the Great Depression. An act of Congress in 1934 created the Federal Housing Administration, which made home ownership affordable for a broader segment of the public with the establishment of mortgage insurance programs. These programs made possible the low, down payments and long-term mortgages that are commonplace today but were almost unheard of at that time.

In 1937, the U.S. Housing Act sought to address the housing needs of low-income people through public housing. The nation’s housing stock at this time was of very poor quality in many parts of the country. Inadequate housing conditions such as the lack of hot running water or dilapidation was commonplace for poor families. Public housing was a significant improvement for those who had access to it. At the same time, the post-World War II migration from urban areas to the suburbs meant declining cities. Federal programs were developed to improve urban infrastructure and to clear “blight.” This often-meant wholesale destruction of neighborhoods and housing, albeit often-low quality housing lived in by immigrants and people of color.

In 1965, Congress elevated housing to a cabinet-level agency of the federal government, creating HUD, which succeeded the Housing and Home Finance Agency, which succeeded the National Housing Agency. HUD is not the only federal agency to have begun housing programs in response to the problems of the Great Depression. The U.S. Department of Agriculture (USDA) sought to address the poor housing conditions of farmers and other rural people through the 1935 creation of the Resettlement Administration, predecessor to USDA’s Rural Development. USDA’s rural rental and homeownership programs improved both housing access and housing quality for the rural poor.

The cost of operating public housing soon eclipsed the revenue brought in from resident rents. This reality is endemic to any program that seeks to provide housing or other goods or services to people whose incomes are not great enough to afford the prices offered in the marketplace. In the 1960s, HUD began providing subsidies to public housing agencies (PHAs) that would help make up the difference between revenue from rents and the cost of adequately maintaining the housing. In 1969, Congress passed the “Brooke Amendment,” codifying a limitation on the percentage of income a public housing resident could be expected to pay for rent. The original figure was 25% of income, which was later raised to the 30% standard that exists today. Advocates often refer to these as “Brooke rents,” for Senator Edward W. Brooke III (R-MA), for whom the amendment is named.

Beginning in the late 1950s and continuing into the 1960s, Congress created a number of programs that leveraged private investment to create new affordable rental housing. In general, these programs provided low interest rates or other subsidies to private owners who would purchase or rehabilitate housing to be rented at affordable rates. The growth in these private ownership programs resulted in a boom in affordable housing construction through the 1970s. However, once the contracts forged by HUD and private owners expired, or owners decided to pay their subsidized mortgages early, those affordable units could be lost from the stock.

The Civil Rights Acts of 1964 and 1968 included housing provisions that were intended to prevent discrimination against members of protected classes in private or public housing. Different presidential administrations have prioritized these fair housing provisions to varying extents, but their existence has provided leverage to advocates seeking to expand access to affordable, decent housing, particularly for people of color.

In January 1973, President Richard Nixon created a moratorium on the construction of new rental and homeownership housing by the major HUD programs. The following year, the Housing and Community Development Act of 1974 made significant changes to housing programs, marked by a focus on block grants and an increase in the authority granted to local jurisdictions (often referred to as “devolution of authority”). This act was the origin of the tenant- and project-based Section 8 rental assistance programs, and it created the Community Development Block Grant (CDBG) from seven existing housing and infrastructure programs.

Structural changes in the American economy, deinstitutionalization of persons with mental illness, and a decline in housing and other support for low-income people resulted in the dramatic increase in homelessness in the 1980s. The shock of visible homelessness spurred Congressional action, and the McKinney Act of 1987 (later renamed the McKinney-Vento Act) created new housing and social service programs within HUD specially designed to address homelessness.

Waves of private affordable housing owners deciding to “opt out” of the project-based Section 8 program occurred in the 1980s and 1990s. Housing advocates – including PHAs, nonprofit affordable housing developers, local government officials, nonprofit advocacy organizations and low income renters – organized to preserve this disappearing stock of affordable housing using whatever funding and financing was available to them.

The Department of the Treasury’s Internal Revenue Service was given a role in affordable housing development in the Tax Reform Act of 1986 with the creation of the Low-Income Housing Tax Credit, which provides tax credits to those investing in the development of affordable rental housing. That same act codified the use of private activity bonds for housing finance, authorizing the use of such bonds for the development of housing for homeownership, as well as the development of multifamily rental housing.

The Cranston-Gonzales National Affordable Housing Act of 1990 (NAHA) created the Comprehensive Affordable Housing Strategy (CHAS), which obligated jurisdictions to prioritize housing needs to better determine how to allocate the various block grants (such as CDBG) that they receive. CHAS is the statutory underpinning of the current Consolidated Plan obligation. Cranston-Gonzales also created the HOME program, which provides block grants to state and local governments for housing. In addition, NAHA created the Section 811 program, which has provided production and operating subsidies to nonprofits for housing persons with disabilities.

Beyond changes to the structure of many federal housing programs, no significant investment in new housing affordable to the lowest income people has been made in more than 30 years, and a great shortage of housing affordable to that population still exists. Since the creation of the Section 8 programs in the early 1970s, no new federal program has the deep income targeting necessary to meet the needs of people with the greatest housing affordability burdens. As studies from NLIHC show, the federal investment in housing has not increased at pace with the overall increase in the federal budget, and expenditures on housing go overwhelmingly to homeownership, not to rental housing for people with the greatest need.

Housing advocates have worked for more than a decade for the establishment and funding of the National Housing Trust Fund (NHTF), which will, once funded, build, preserve, rehabilitate, and operate housing affordable to extremely low-income people. President George W. Bush signed NHTF into law in 2008 as a part of the Housing and Economic Recovery Act, but the original source of funding was suspended and the program is not yet in operation. In December 2014, the Federal Housing Finance Agency lifted the suspension so that money can flow to the NHTF.

from the National Low Income Housing Coalition,


  • There is an affordable housing crisis. Communities across the country are facing low-income housing shortages – there is not a single county in the United States that can fill 100% of its low-income population’s need for safe, affordable housing.
  • Nationally, the number of families using Section 8 rent subsidy has doubled over the last 25 years to 2.3 million.
  • 46 million people live in poverty in the United States. This number has increased 38% over the last 13 years – the highest rate in almost 60 years.
  • More than 11 million Americans now pay more than half their salaries for their monthly income for rent. This rate has increased more than 30% over the last five years, which is also a record high.
  • One in four housing markets not affordable by historic standards; new 2016 data from ATTOM Data Solutions shows 24% of US counties are now less affordable now than last year at 19%.
  • 15 million children (or 21% of all children) live in families with incomes below the federal poverty level.
  • Poor housing and poor health are tied together, especially with children. When homeless or low-income families have to comprise on housing, their health declines including worsening asthma and allergies tied to poor housing conditions; pests; molds and chronic dampness; lead exposure and increased accidents/injuries from exposed wiring and other needed repairs.
  • Millions of Americans are struggling to afford a place to live. In order to afford a modest, two-bedroom apartment in the U.S., renters need to earn a wage of $20.30 per hour. In six states and the District of Columbia they need to earn more than $25 per hour.
  • US minimum wage is $7.25/hour. A renter would need to work 90 hours per week to afford a one-bedroom rental home at the Fair Market Rent and 112 hours per week to afford a two-bedroom.
  • On average, there are only 28 adequate and affordable housing options for every 100 extremely low-income households.
  • 30% of chronically homeless people have serious mental health issues.
  • 50,000 veterans are homeless in the United States and 1.4 million are considered at risk of homelessness due to poverty, lack of support systems and poor living conditions.