A combination of factors, such as expense deceleration and higher allowable rents, has propelled the net operating income across affordable housing properties. The index grew 5.6 percent year-to-date through August, and ticked up 7.4 percent in 2024, according to the latest Yardi Matrix Affordable Housing research bulletin.
The analysis explored more than 7,000 income-restricted properties and found an average NOI per unit of $6,886 in August, which resulted from an income of $15,440 and expenditure of $8,554 per apartment. The income and expense sides of the equation were up 3.7 and 2.3 percent year-to-date through August, respectively. The rate at which income grew compared to expenses was also higher in 2024, yet this was not always the case. Between 2021 and 2024, expenditure rose 24 percent, while income ticked up 18 percent.
Starting in 2024, HUD’s formula for maximum affordable rents, which considers variables including inflation and area median income, allowed operators to increase rates, resulting in an acceleration of income. What’s more, the formula for Sector 8 vouchers also changed this year, providing higher subsidies.
Simultaneously, some expenses began compressing this year, with insurance growing only 0.2 percent during the first eight months of 2025. That’s a significant slowdown considering the rate was up overall by 128 percent between March 2020 and August 2025. These changes in revenue, mixed with an expense moderation, ultimately led to an NOI boost.
Affordable housing NOI at a metro level
While NOI grew at a macro level, this trend wasn’t uniformly present across all markets. Yardi Matrix’s top 30 metros encompassed a handful of metros which witnessed a double-digit increase, such as Raleigh, N.C., Kansas City, Mo., Columbus, Ohio and Washington, D.C., but also comprised several which saw decreases, including Austin, Texas, Seattle, Baltimore and Atlanta.
This divide was partially driven by insurance, which did not record a consistent change across metros, with fees in Raleigh and Columbus dropping 7.4 percent and 13.8 percent year-to-date, respectively.
Although the markets that saw NOI decreases had above-average expense growth, they also suffered from a weak income increase. Austin’s affordable stock faced great competition from market-rate properties, whose inventory expanded 25 percent across the past three years, leading to lower affordable occupancy. Meanwhile, markets such as Seattle or Washington had other issues, such as increased turnover, unpaid rents and fewer renewals.
Future affordable housing benefits and challenges
The affordable sector has much to look forward to in 2026, including LIHTC allocation increases meant to boost development and preservation, as well as strong demand across low- and medium-income households, the bulletin shows.
Though there are certain concerns as well. Affordable rent growth may likely slow down as the factors in HUD’s formula, such as high inflation and rising household incomes, have tempered. Additionally, cuts to HUD’s budget could lead to other challenges, including the removal of millions of tenants from the housing aid pool.
Another potential issue stems from affordable housing’s exposure to expenses, as such expenditures eat up to 55 percent of income across income-restricted properties, compared to 44 percent in market-rate communities. Therefore, an increase in the cost of labor, materials or insurance would disproportionately affect affordable properties.
Read the full Yardi Matrix affordable housing report.
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