11 Affordable Housing Trends That Can’t Be Overlooked in 2022

For the last two years, the affordable housing market has changed significantly. For those who manage properties, keeping a close eye on affordable housing trends is essential for planning for the future and protecting your assets.

Thankfully, there are solutions available for streamlining your management system, so you spend the time you need to stay up to date on the latest affordable housing market trends. Property management software systems like ExactEstate cater to helping property owners manage their properties and tenants more efficiently than ever.

There's a lot to look forward to this year, but you need to know where to look to see what impacts significant affordable housing market trends are making. Read on to learn more about the affordable housing trends that will continue to affect the current state of the market.

1. Government Reform

There is building pressure from constituents to increase government-backed affordable housing programs for all sectors; low-income, moderate-income, and the workforce.

A study funded by Habitat for Humanity in 2019 found that 37.2% of households were spending 30% or more, and about 14% of households were spending 50% or more of their income.

With such a large affordable housing market crisis on its hands, the government is looking for ways to intervene. 

The Biden administration campaigned to establish a $100 billion Affordable Housing Fund as part of the Build Back Better Agenda. This included expanding the Low-Income Housing Tax Credit Program and the Housing Trust Fund Program. It is unclear how and when these plans will materialize, but the goal is to increase the supply of quality, low-income rental units.

Though the outcome can't currently be predicted, it's crucial to stay up-to-date on the government's impact.

2. Remote Workers

The COVID-19 pandemic caused shifts in affordable housing trends. This was mainly due to the transition to remote work and at-home positions becoming more common.

Some workers needed to move to find a living arrangement that allowed for a home office. With the need to move and the requirement for more space on the same budget, many people are choosing to move to less desirable areas.

This has and will increase gentrification in historically low-income areas and may possibly lead to more price hikes in these markets.

3. People Moving Away From Large Urban Markets

Based on Apartment List data, less populated cities are seeing an increase in the new rental population. This is while high-end, overpopulated cities like San Francisco show trends of renters leaving the city for affordable housing apartments as many individuals lost their jobs during the pandemic and are required to find an alternate means of living.

This suggests that due to the current state of the economy and the high cost of rent in large cities, people are moving to less populated, more affordable areas with a requirement for affordable housing. The pandemic significantly contributed to this, with the significant increase in remote workers and the discrepancies of COVID-19 regulations amongst states. 

4. Zoning Laws

As state and local governments start to take action regarding the crisis involving affordable housing apartments, there will be significant changes in zoning laws. Changes will likely move toward zoning more areas for housing construction.

Using property management software like ExactEstate can help improve management and streamline day-to-day operations.

5. Increased Social Services

Increased social services from the federal government will likely increase to coincide with affordable housing trends. Legislators and non-profits alike know that affordable living for low-income households means more than just their rent. 

Increased social services like after-school youth programs and employee training can help people with long-term goals. And services targeted to the homeless population and displaced persons can greatly benefit economically depressed areas.

6. Supply Chain Issues

Material shortages have primarily contributed to the lack of new housing development. There does not seem to be a resolution to these supply chain issues on the horizon. This increases the price of apartments; builders can not afford materials and labor to keep projects on budget and must raise prices to cover their costs.

7. Barriers to Homeownership

It is increasingly more difficult for people to make the jump to homeownership from renting, and it's not just true for low and middle-income potential buyers. All potential buyers are experiencing ongoing supply issues and competitive buying tactics.

Markets everywhere are highly competitive, with homes selling in mere hours, often sold to cash buyers or companies with tremendous buying power. And the prices are skyrocketing and will continue to do so.

When fewer people are able to transition into homeownership, the need for affordable housing apartments increases, contributing to the shortage in availability.

8. Increased Diversity in Neighborhoods

Renters are becoming more aware and sensitive to diversity and equal opportunities in their neighborhoods. Neighborhoods will continue to see racial and socioeconomic groups integrate.

The increase in diversity is mainly due to gentrification and new developments moving into historically low-income areas for cheaper land. But also, thanks to government and non-profit housing programs. For example, the Veterans Housing and Homeless Prevention Program provides financing support for veteran-only housing projects. There are also non-profit organizations like Habitat for Humanity that build homes for low-income families.

9. Rent Control and Eviction Regulations

Rent control laws often follow an economic downturn after a global pandemic. Rental supportive regulations that came into effect during the COVID-19 pandemic are likely to linger in some cities and states.

Rent control laws vary between local and state governments, but, essentially, a maximum rent is placed on a rental unit or building. It is one way the government aids in supplying affordable housing apartments to citizens.

Rent control laws also protect tenants from eviction without cause. The landlord is obligated to renew the lease each year if they have a rent-controlled tenant who wishes to continue their agreement. These are permanent, unlike temporary pandemic eviction regulations that halted all evictions. Eviction regulations aim to improve neighborhood stability and protect more vulnerable demographics like the elderly.

An increase in rent control and eviction legislation could deter new developments in some markets. Developers may be more inclined to build condos than affordable housing apartments, contributing to the shortage.

Good property management software like ExactEstate is the key to collecting tenant payments and reconciling subsidized rents for property managers.

10. Privatization of Affordable Housing

Historically, federal housing programs were responsible for developing and managing public housing for the lowest-income households. Now, legislation has moved toward privatization to improve poverty-stricken neighborhoods.

Federal housing programs such as the Department of Housing and Urban Development's Rental Assistance Demonstration program are helping increase participation from the private section in affordable housing market developments.

Critics worry that privatization will not help the affordable housing crisis, but privatization may be the only solution after decades of federal underfunding and delayed work.

11. Adaptive and Sustainability-Focused Projects

Sustainability-focused projects are one of the fastest-growing affordable housing trends. The increased effort to be sustainable has led to the redevelopment of buildings to meet the needs of the affordable housing market. For instance, property owners may convert an old hotel into studio apartments or transitional housing.

If you're interested in investing in alternative options for apartments and houses, use a property management software like ExactEstate to stay on top of daily tasks so you can focus on your assets' bigger picture.

Bottom Line

Trends in affordable housing apartments continue to change the future for tenants and property owners alike. Staying up to date on affordable housing trends is a requirement of managing your properties with informed decisions and foresight.

Let a property management software like ExactEstate lift some of your burdens so you can keep your asset management in line with modern trends.