Across major U.S. cities, a paradox is unfolding: thousands of apartments labeled “affordable” are sitting vacant, while people with the lowest incomes sleep in shelters, cars, or overcrowded rooms. The core issue isn’t just a shortage of housing overall—it’s a mismatch between who new “affordable” units are built for and who needs them most.
The mismatch: “Affordable” doesn’t mean affordable for the poorest
Mathew Davis, 49, lives in a homeless shelter in Austin, Texas. He earns a few hundred dollars a month donating blood plasma. Even a $450-a-month tiny home with no running water and a shared bathroom is a stretch. At the same time, more than 4,500 units the city classifies as affordable—nearly 16 percent—sit empty.
Davis’s story is not unique. The poorest Americans face the most acute shortage of homes they can actually afford. Most low‑income housing financed in recent years targets households earning 50 percent of an area’s median income (AMI) or more, not the “extremely low‑income” (ELI) group at or below 30 percent of AMI or the federal poverty line.
Extremely low‑income renters: About 11 million households nationwide fall into this category (incomes at or below poverty or 30 percent of area median income).
Available affordable units: Only about 4 million affordable and available rental homes exist for these 11 million ELI households—roughly 35 homes per 100 such households.
Cost burden: Around three‑quarters of ELI renter households spend more than half their income on rent and utilities, leaving little for food, health care, or transportation.
In short, the system is producing “affordable” units that are affordable to the working poor and lower‑middle class, but still out of reach for people like Davis.
Why units sit empty while people remain unhoused
1. Rents for “60 percent AMI” units now rival market rates
In cities such as Austin, Denver, and Portland, rents on units set aside for households at 60 percent of AMI have climbed close to market‑rate levels. That makes them unattractive to the intended tenants—and sometimes even to slightly higher‑income renters who can bypass red tape.
In Austin, the vacancy rate for all affordable housing is nearly 16 percent, with over 4,500 vacant units. A healthy vacancy rate is around 5 percent.
In Denver, 60 percent AMI units financed by the federal Low‑Income Housing Tax Credit (LIHTC) show a 13 percent vacancy rate; 80 percent AMI units show 21 percent.
In Portland, over 1,700 affordable units are vacant (7.5 percent vacancy overall), most of them aimed at 60 percent AMI households—about $54,000 annual income for a single person—with rents capped around $1,444/month, close to the city’s average one‑bedroom market rent of $1,581.
When “affordable” rents approach market rents, many renters—especially those near the cutoff—opt for market apartments with faster approvals and fewer documentation hurdles.
2. Burdensome application processes push people away
Affordable housing applications often require extensive paperwork: bank statements, pay stubs, bills, even Venmo histories. Approval can take weeks. By contrast, many market‑rate complexes can approve applicants in minutes.
Rebekah Fischer of LDG Development, which builds affordable housing, says her company is “in direct competition” with new market‑rate apartments. She describes the affordable process as slow and intrusive, while market‑rate deals can approve someone “within two minutes.”
For a renter like Jaiden Barbee in Portland—earning around 55% of AMI and on waitlists for affordable housing—the trade‑off is clear: “I’d rather spend the $200 extra just to get into a place easier… and doesn’t have all these hoops.”
3. The financing model favors higher income tiers
The primary federal tool for creating affordable rental housing is the Low‑Income Housing Tax Credit (LIHTC), which has financed nearly 4 million units over 40 years. But the program’s design and economics skew toward higher income bands within the “low‑income” range.
In 2024, only about 12% of LIHTC‑financed units were reserved for the poorest renters (30 percent AMI). The majority were for households at 50 percent of AMI or above.
In Austin, a single person at 60 percent AMI earns roughly $47,000 a year; an extremely low‑income person earns under $28,000. Yet many new “affordable” projects target the higher bracket because the numbers work better.
Developers explain the math bluntly. Carmen Romero, CEO of True Ground Housing Partners, notes that a unit for someone at 60% AMI (nearly $70,000/year in the D.C. area) brings in $1,715/month in rent. After $1,575 in mortgage and operating costs, only $140 remains. For a 30 percent AMI tenant, rent would be about half that—making the project financially infeasible without deep, layered subsidies that often don’t exist.
The voucher gap: help exists, but not for most who qualify
Housing vouchers (such as Section 8) can bridge the gap by letting the poorest households rent units targeted at higher income levels. But the system is severely underfunded.
Experts estimate that only one in four eligible families ever receives a voucher.
Waitlists can stretch for years, and many eligible households never get on them or drop off due to complexity and instability.
Some economists argue the LIHTC program is overly complex and costly, and that direct tenant subsidies (vouchers) would be more efficient. Others counter that LIHTC properties are required to accept vouchers, while many market‑rate landlords are not—so the two tools work together.
Even so, without vouchers, developers say it’s nearly impossible to serve the 30% AMI group at scale. The subsidy has to cover either operations or capital costs; rent alone at those income levels cannot sustain a building.
Local goals vs. local reality: the Austin example
Austin set an ambitious goal: build 20,000 units between 2018 and 2027 for extremely low‑income households—about 17 percent of the city’s households. By 2024, only 543 such units had been built. Meanwhile, all 15,000 planned units for those earning 60–80 percent of AMI were completed.
City officials acknowledge the shortfall and say they are adjusting funding priorities to favor proposals that include 30 percent AMI units. But the gap between targets and outcomes underscores the structural problem: the financial and regulatory environment makes it far easier to build for the “higher” end of low‑income than for the poorest.
For residents like Davis, who once lived in his car before getting a bed in a shelter, the policy debate is abstract; the daily reality is concrete: “I want to shut the door at night and be able to sleep… I really just want to find the right place.”
The national picture: a 7.2‑million‑home gap
The Austin story reflects a national crisis. The National Low Income Housing Coalition’s 2026 “Gap” report finds:
A shortage of 7.2 million affordable and available rental homes for extremely low‑income renter households.
Only 35 affordable and available homes for every 100 ELI renter households nationwide.
About 74 percent of ELI renters are severely cost‑burdened, spending more than half their income on housing.
Separately, the overall U.S. housing supply gap reached an estimated 4.03 million homes in 2025, as new construction lagged behind household formation, especially affecting younger and lower‑income households.
These numbers show two overlapping shortages: a general undersupply of homes, and a much deeper undersupply of homes affordable to the poorest.
Policy tensions and possible directions
The article and related data highlight several recurring themes in the policy debate:
Targeting the deepest need vs. financial feasibility
Projects for 30% AMI households often require multiple subsidies (LIHTC plus HOME grants, Housing Trust Funds, project‑based Section 8, Housing Choice Vouchers). Only a small share of deals can layer enough support to reach this group.
Without such layering, even a building with no debt can’t cover operating costs on 30% AMI rents.
Production (building new units) vs. demand‑side subsidies (vouchers)
Critics say LIHTC is bureaucratic and expensive, and that expanding vouchers would more directly help the poorest.
Supporters argue LIHTC creates permanently affordable stock that must accept vouchers, while voucher holders struggle to find landlords in the private market.
Local incentives and zoning
Cities can push for deeper affordability by giving funding preference to 30% AMI units, streamlining approvals, and allowing denser, lower‑cost construction. Austin’s shift toward prioritizing 30% AMI proposals is one example.
But without additional federal and state subsidy, local budgets alone can’t close the 7.2‑million‑home gap.
Preserving existing affordable stock
Harvard’s 2026 housing report warns that more than half a million LIHTC‑financed homes could lose rent protections in the coming decade as affordability covenants expire.
Losing these units would worsen the shortage even if new construction continues.
What this means for “housing for the poor” in the USA
The central issue is no longer just “not enough homes.” It’s that the current system:
Builds many units labeled “affordable” that are still too expensive for the poorest.
Leaves a massive gap between the number of extremely low‑income households and the number of homes they can realistically afford.
Relies on a patchwork of subsidies that rarely line up deeply enough to serve those at or below 30 percent of AMI at scale.
Allows thousands of “affordable” units to sit vacant while shelters overflow, because the intended tenants can’t qualify financially or navigate the process.
Until financing, targeting, and administration are reoriented toward the deepest need—30 percent AMI and below—the paradox of empty “affordable” apartments alongside rising homelessness and extreme cost burdens is likely to persist.