What Are the Biggest Barriers to Affordable Housing Development?

The U.S. housing market has confronted a series of affordability hurdles over the last several decades, leaving behind a deficit of 3.8 million affordable homes. In part, the slowdown in affordable housing development is a result of financing gaps, from pricier building materials to aggressive interest rate hikes sending the cost of housing development to new highs.

In many cases, those financing obstacles are forcing developers to scale back or entirely halt affordable housing projects, particularly when more expensive loans and building materials outweigh new-construction profits, Forbes reports.

“This crisis and its far-reaching complexities are unlike anything I have experienced in my career,” says Aaron Pechota, executive vice president of development at The NRP Group, one of the three largest affordable housing developers in the nation.

“The challenges hindering affordable housing development across America need to be addressed immediately to avoid prolonging the situation. When affordable housing projects are put on hold and remain suspended, the shortage worsens substantially, as these developments typically take two to three years to complete.”

Read more