Affordable Housing Stock: A Nationwide Overview

Given the current economic climate and the housing crisis, affording a home has become increasingly difficult for many Americans.

According to the Department of Housing and Urban Development (HUD), if more than 30 percent of income is spent on a monthly housing payment, the individual is “cost burdened.” As of December 2022, most large U.S. cities have far surpassed this threshold. This, paired with skyrocketing interest rates and a substantial lack of housing units, has made homeownership for low- and middle-income Americans nearly impossible.

The Housing Supply Crisis

The housing supply shortage is a key contributor to the greater housing affordability crisis. Across the country, the most recent report estimates that the U.S. is short 3.8 million housing units to keep up with household formation. The roots of the housing stock crisis can be linked o the aftermath of the Great Recession: Between the years of 2008 and 2018, fewer new homes were built than in any other decade since the 1960s.

While the most recent reports on the nationwide shortage were released in 2019, it is clear that the supply and affordability challenges based on 2019 data have only been exacerbated by the COVID-19 pandemic. Although the supply crisis is one that affects all major markets, many economists and researchers underscore that solutions will require a local approach.

Homeownership is the most important tool for Americans to acquire and build intergenerational wealth. Most families, especially low to moderate-income families, hold their net worth in the value of their home—and without access to affordable homeownership opportunities, lower- and middle-income families are denied the chance to build wealth.

The homeownership disparity primarily affects Black and brown families who have historically been excluded from means of wealth-building. From redlining practices in the early and mid-20th century to exclusionary zoning laws, Black and brown families have faced discrimination in every part of homeownership. And today, racial bias and discrimination continue to shape the process of buying a home for Black and brown families—from mortgage applications to home appraisals.

Increasing the National Housing Supply

In May of 2022, the Biden Administration released a Housing Supply Action Plan. This initiative aims to close the housing shortage within the next five years through a mix of administrative and legislative policies. This plan will start with the creation and preservation of affordable housing units over the next three years.

In addition to helping renters struggling with high costs, the Plan also seeks to boost supply and create new opportunities for homeownership in several key ways:

  • Reward jurisdictions that have reformed zoning and land-use policies with higher scores in certain federal grant processes.
  • Deploy new financing mechanisms to build and preserve more housing where financing gaps exist.
  • Expand and improve existing forms of federal financing, including for affordable multifamily development and preservation.
  • Ensure that more government-owned supply of homes and other housing goes to owners who will live in them or non-profits who will rehab them—not large institutional investors.
  • Work with the private sector to address supply chain challenges and improve building techniques to finish construction in 2022 on the most new homes in any year since 2006.

How New Markets Tax Credits Can Help

We must create more opportunities for low- and middle-income families—particularly Black and brown families—to purchase homes. At Smith NMTC, the first organization to pioneer the use of the New Markets Tax Credit (NMTC) program for affordable for-sale housing, we believe that increasing the use of this federal tax credit for affordable for-sale housing development can help greatly in addressing the housing shortage and transforming communities across the nation.

The federal New Markets Tax Credit (NMTC) program offers incentives for investment in low-income communities. Nonprofit developers, business owners, and other mission-driven companies can use the NMTC program to dramatically increase the availability of for-sale housing.

This program has the ability to transform lives and communities—and with the continued use and expansion of the NMTC program, it is possible to improve the national affordable for-sale housing shortage.

A National Overview

To illustrate the challenges in homeownership today, we’ve outlined several of the key major markets across the country and how homeowners are faring in the housing crisis.

New York

The third least affordable city in the U.S., the median purchase price of a home in New York City increased to $885,750 in December 2022. Homeowners spent approximately 78% of their income on housing, a number that has decreased since the summer of 2022 when homeowners directed 84% of their income on housing costs.

New York City is largely unaffordable for most, with just over 31 percent of the population owning a home. This number is largely the same as it was over 10 years ago and it’s also half the nationwide rate of homeownership and less than nearly every other American city. Between 2019 and 2022—as the typical home price increased to almost four times the median family income nationally—the price of a home in New York City remained more than nine times that level.


In the 2022 November midterms, Colorado passed Proposition 123: An historic attempt to support affordable housing in the state, promising millions of dollars in annual funding for a variety of housing and homeless prevention efforts. The money—$300 million from 2023 onward—is designated to be used for a variety of affordable housing efforts: Land banking for future developments, funding for new affordable units, financial help for first-time homeowners, and replacing traditional banks with an organization that gives returns back to tenants.

This is a positive step forward to addressing Denver’s affordable housing supply shortage. In December 2022, the average home price was $537,500 and the average household income was $79,149, making the share of income directed to homeownership 40%.


Over the last 30 years, Washington’s population has grown by 60%—and yet the number of housing units has only increased by 33%. The ramifications of this growth coupled with a tight market have led to a tremendous increase in home prices, nearly tripling in the last decade. As of December 2022, the average home price in Seattle is $730,000 with homeowners who can even “afford” those prices spending an average of 42% of their income on housing costs. Low to moderate income buyers are locked out of the market entirely.

Seattle spent months as one of the nation’s hottest housing markets with prices climbing faster than most cities in the U.S., often second only to Phoenix. However, in November 2022, things changed: Seattle is now one of the fastest-cooling housing markets, with prices declining 3% from August to September—the biggest monthly dip in the country.

Zoning ordinances and government regulations are key factors driving the housing shortage in Seattle and in Washington state. Removing some of these barriers and rethinking the state-wide approach to affordable homeownership may be the only path forward to making homeownership achievable for low- and middle-income families.

Los Angeles

The second least affordable city to own a home in is Los Angeles, ranked just behind Miami and ahead of New York City. As of December 2022, the median home price in Los Angeles was $949,000, with a monthly payment of $4,824, and a median household income of $69,695. If a household with median income could somehow cobble together a downpayment in excess of their annual income, their monthly mortgage payments would equal 83% of their household income.

Luxury construction in LA is abundant and in high demand; but affordable for-sale housing construction is minimal, though the demand would be high if the inventory and purchasing supports for buyers were in place. According to the California Housing Partnership Corp. (CHPC), there is a shortfall of 568,000 units affordable to low-income renters. And renters are constantly at the mercy of rising rents and bad or greedy landlords. The shortage of affordable homeownership opportunities, particularly for low- and middle-income families, makes it very difficult for these renters to access homeownership to break the cycle

This leads to overcrowding—housing with more than one person per room, excluding bathrooms—and in LA, 11% of homes are overcrowded, a rate that is three times the national average. Overcrowding magnifies many dangers, including fires, stunted child development, higher death rates, and faster spread of viruses such as COVID-19.

In addition, 67% of all residential units in LA, 76% of all privately owned vacant lot areas, and 49% of all vacant land are owned by investment vehicles—a concerning statistic far larger than the national rate.

Learn More about Smith NMTC

We offer transparency with our proprietary models because we believe so deeply in homeownership—and its ability to enact sustainable change in the lives of low-income families across the country. You can access our available resources, including our three models, by clicking here.

We’re also committed to serving as a resource and a collaborative partner for anyone interested in utilizing the NMTC program for affordable for-sale homeownership. Reach out to us at to schedule a call or learn more.

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Published On: January 11, 2023Categories: Housing News