The affordable housing market is poised to continue growing in 2026. Investors are bullish on the sector, while developers are sanguine about the coming year, despite economic policies potentially dampening construction, according to Walker & Dunlop’s annual survey conducted at the Affordable Housing Finance Live conference.
Some of the top multifamily owners, developers, management firms and state housing agencies responded to the questionnaire, which reached its third iteration with 115 participants.
Nearly all respondents—90 percent—believe affordable housing appetite will increase in 2026. Notably, this isn’t just a prediction, as such capital deployment growth has already begun, with 65 percent of participants reporting an increase in debt and equity placement during the past year.
For reference, as part of last year’s survey, 70 percent of contributors considered that investment was on track to grow in 2025. This delta of just 5 percent between last year’s expectation and this year’s reality underscores that the sector is predictable for seasoned professionals.
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Buoyant investor appetite served as a catalyst for many LIHTC funds closing in 2025. Some notable vehicles include Greystone’s $103 million fund—its first such deployment strategy—and Walker & Dunlop’s $240 million investment vehicle.
Plenty of metro areas have felt this capital deployment already, especially “areas with as-of-right property tax exemptions for affordable housing,” Jeff Dean, director of analytics with Walker & Dunlop’s affordable housing sales division, told Multi-Housing News.
Other local policies to attract investment include “expedited planning and zoning review processes,” according to Dean. “These efforts by local authorities to speed timing and reduce ongoing operating costs are helping push new opportunities to closing.”
Tailwinds for income-restricted construction
Beside acting as an investment magnet, these changes at a local level may also lead to an increase in construction, complementing HUD’s involvement in the sector. Almost 60 percent of respondents believe that the government agency has been aiding development.
At the same time, 18 percent consider HUD’s participation as ineffective due to regulatory complexity and funding limitations. The remaining 23 percent have no strong opinion one way or another. These views do not reflect the agency’s budget allocations, however, which have yet to be finalized, but may include cuts to hundreds of thousands of rental assistance program recipients, according to NLIHC.
Participants view the upcoming LIHTC changes in the One Big Beautiful Bill as a net positive, with 58 percent believing these modifications would bear a moderate-to-major impact, while 29 percent think the act would have little-to-no effect on the sector. Just 13 percent were not familiar with the changes.
The affordable housing sector gripes with economic policies
Contributors were not as enthused about economic policies, such as tariffs, with 70 percent of respondents believing them to negatively impact affordable housing development. However, the proportion of participants holding a negative outlook on tariffs dropped from 84 percent last year.
Just 13 percent consider such policies as not bearing a negative impact, while 17 percent are neutral, suggesting a belief that the higher material and labor costs induced by these regulations could be absorbed or offset in certain ways.
“While we’re not seeing a direct comment on items like the impact of tariffs on budgets, we are hearing that developers are more amenable to Guaranteed Maximum Price construction contracts with general contractors,” Dean told MHN.
“We expect to see more highly refined scopes of work, with higher-end amenities and finishes being value engineered out of construction budgets,” he concluded.
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Gillian Executive Search is a leader in Affordable Housing Development, Financing, Design and Construction recruiting. www.gessearch.com