Reimagining Affordable Housing: An Imperative for Systems Change

Housing costs are causing unprecedented financial stress for households across the United States. For millions of families, safe and stable housing feels increasingly out of reach, and for those working in the housing sector, the challenges of producing and preserving affordable homes have never been more daunting.

This crisis has been building for decades. Our housing system has long failed to produce enough homes to meet demand, especially at prices affordable for working families. But today, a combination of economic and policy pressures has pushed this simmering crisis to a boiling point. Rising costs and economic constraints — from property operating expenses, rent arrears and insurance to building materials and labor shortages —are straining developers and owners alike. For millions of Americans, rent and mortgage payments are consuming greater shares of income, leaving less room for health care, food, transportation, and education.

What is clear is that our current system cannot deliver the scale of homes our country needs. Nor can it sustain the stock of affordable housing we already have. We need to chart a new course—a roadmap toward a stronger, more inclusive, and highly functional housing system.

That conviction is what drives Housing Partnership Network’s Reimagining the Affordable Housing System initiative. Some might argue that the current political and economic turbulence makes this the wrong time to talk about systems change. I believe the opposite is true. It is precisely because the system is under such strain that we must act boldly. Housing is not a partisan issue. It is the foundation of a healthy economy and a healthy society. Stable homes support higher employment, better health outcomes, stronger educational achievement, and more vibrant communities. They are essential to democracy itself.

Encouragingly, housing affordability has risen to the top of the agenda for many policymakers. This summer, we witnessed meaningful progress in Congress. In July, the budget reconciliation bill included a historic expansion of the Low Income Housing Tax Credit (LIHTC), one of the most important federal tools for producing and preserving affordable housing. This expansion—hard-won after years of bipartisan advocacy—holds the promise of supporting an additional 1.2 million affordable homes over the next decade. This infusion of more housing credits in the market led to an announcement by the Federal Housing Finance Agency (FHFA) to allow Fannie Mae to double its investment in LIHTCs, up to $2 billion annually.

Another major milestone was the long-awaited permanence of the New Markets Tax Credit, a vital resource for homeownership and community development. These victories remind us that persistent advocacy and broad coalitions can deliver tangible results—though there remains much work to be done.

Beyond reconciliation, there are signs of bipartisan momentum. In the House, Representatives Flood (R-NE) and Cleaver (D-MO) initiated the process of reauthorizing HOME, the largest appropriated program focused on affordable housing production. In the Senate, Chair Tim Scott (R-SC) and Ranking Member Elizabeth Warren (D-MA) of the Banking Committee introduced the ROAD to Housing Act of 2025, which includes provisions designed to boost production and affordability. HPN has engaged in both conversations, and we remain hopeful that consensus can translate into real legislative progress.

Yet even amidst these opportunities, we have also seen policy actions that pose an existential risk to our nation’s affordable housing system. The Administration’s recent budget proposal calls for eliminating HOME, slashing the Community Development Block Grant, and dramatically reducing rental assistance for low-income households through a block-granting scheme that could destabilize millions of families and the housing sector more broadly. At the same time, the Office of Management and Budget (OMB) has blocked agencies such as Treasury and HUD from deploying resources already approved by Congress. When you add in the mass layoffs of federal employees earlier this year, which degrades agencies’ capacity to administer programs, the result further weakens a housing delivery system that has historically been under resource and over stressed. All of these actions are threatening the essential public-private partnerships that underpin affordable housing production and preservation in this country.

Other decisions have exacerbated economic pressures. Tariffs increased the price of building materials and restrictive immigration policies are worsening labor shortages in construction. Together, these policies are making it harder—and more expensive—to build. For-profit developers can sometimes shift costs to luxury buyers and renters. But in the affordable space, there is no cushion. Our sector cannot absorb unlimited costs—and families certainly cannot bear them.

Against this backdrop, it would be tempting to double down only on defensive advocacy: fighting cuts, pressing agencies to release funds, and battling economic headwinds. But while these fights are necessary, they are not sufficient. We need to step back and ask: what would it take to build a housing system that actually works?

That was the underlining question at HPN’s Reimagining the Affordable Housing System Symposium, held last month in Washington, D.C. The symposium capped more than a year of listening sessions with nonprofit and for-profit developers, lenders, policymakers, researchers, and advocates. At the symposium we brought together more than 120 leaders—people who finance, build, operate, regulate, and study housing every day—for a rare chance to think beyond the immediate and envision long-term system change.

We were honored that Dr. Adriana Kugler, then a Governor of the Federal Reserve, chose our event to deliver a major address on housing and the economy. She reminded us of the structural gap we face—had the housing stock expanded at the same pace from 2000 to 2020 as it did in the prior two decades, the U.S. would have 15 million more homes today. She highlighted that construction costs—driven by labor shortages and rising materials prices—are up 25 percent since the mid-2000s. She noted that restrictive immigration policy is further limiting the pool of construction workers, reducing supply and pushing prices higher.

But our discussions at the symposium went well beyond problem diagnosis. Perhaps most striking was the energy in the room. Leaders from across the housing ecosystem were eager to roll up their sleeves, share what they’ve been grappling with, and collaborate on solutions. Throughout the day, participants offered creative solutions to streamline and accelerate the production of housing, preserve and sustain the operations of existing housing, and reform the housing system. The consensus was unmistakable: our current system is unsustainable, and the time for transformation is now.

I left our symposium with both urgency and hope. Urgency, because the cracks in our system are widening. Hope, because of the creativity, commitment, and collaboration I witnessed from leaders across the housing field.

It would be easy to label the current crisis a market failure. But that oversimplifies reality. Private developers cannot sustainably provide homes for people who cannot pay the full cost of building and operating them. Nor can federal agencies act quickly enough, or tailor programs precisely enough, to meet every local need.

That’s why the public-private partnership model remains essential. Nonprofit and for-profit housing organizations are uniquely positioned to knit together government resources with private capital, producing public benefits with market discipline. But for this partnership to succeed, we need a more functional, better-aligned system.

HPN’s Reimagining initiative builds on that principle. In the months ahead, we will publish a series of briefs exploring four dimensions of systems change:

• Increasing supply: how to reduce barriers, streamline regulations, and unlock capital to accelerate production.

• Addressing demand: how to strengthen rental assistance, create stabilizing supports, and ensure families can afford homes.

• The federal role: how to structure programs, funding, and agencies to better align with realities on the ground.
  
  
• State and local opportunities: how to support innovation, zoning reform, and community-driven solutions.

As we move forward, HPN’s role is to be a catalyst—to convene, to test ideas, to advocate, and to help build a stronger system for the future. These briefs are not the final word. They are meant to spark dialogue across the field, surface promising ideas, and test pathways for change. So, I urge you to stay engaged, challenge our assumptions—respectfully, rigorously, and constructively. Share your ideas with us. Join us in charting a roadmap toward a housing system that is resilient, inclusive, and functional and reimagining what housing in America can be.

You can read more about our approach to Reimagining the Affordable Housing System in our framing document and gain insight to the symposium here. If you have questions or ideas to share, please reach out to us at [email protected].