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Affordable housing is undergoing a major transformation in cities across the country, as political leaders, community activists and developers create novel approaches to an issue that has widespread support.
It’s hard to find any major metropolitan area that doesn’t have a shortage of affordable housing. The need has inspired scores of creative development projects, as well as a new look at how to use long-standing programs to get people into homes they can pay for.
“When you think about affordable housing, and you think about who lives there, those people are really the people that we all work with,” said Sheri Thompson, executive vice president and head of affordable housing at Walker & Dunlop on WTOP’s Balancing the Housing Equation 2025. “It’s firefighters. It’s social workers. It’s administrative assistants. They deserve to live in the places that they are working, and it just isn’t happening today.”
Navigating logistical hurdles to affordable housing
Part of the reason that everyday working people have a tough time finding a place they can afford is because it takes time for communities and developers to work through a wide range of complicated issues to build new projects.
Thompson said regulatory hurdles, including zoning, remain some of the most important challenges.
“Because here’s the bottom line: Even if you have the money, you have the land, you have your capital, from the time you buy the land until you actually have people living there, it can be two to four years,” she said. “That’s just too long.”
A variety of factors contribute to the delays, Thompson added.
“A lot of that is a regulatory red tape. It’s zoning approvals. It’s state approvals. It’s environmental concerns. All of that takes time, and it drives up the cost,” she said.
Denver Mayor Mike Johnston told WTOP he’s all too familiar with the regulatory hurdles cited by Thompson.
The mayor’s office has created a “tiger team” of people who work through the permitting and zoning process. “We’re working on transforming how we make that much faster and easier to use for all of our developers and residents that are trying to build here,” he said.
Denver cut permitting time by an estimated 30% in the first year of the project, Johnston said.
Finding affordable housing solutions
At the same time, the demand for affordable places to live remains high. People continue to find it difficult to hit a reasonable price point, while there’s also been a slowdown in construction, Thompson said.
“By 2026, there’ll be less supply generally,” she noted. “And when that happens, rents go up — and they go up at every level — so that pushes everybody down a price point, and it exacerbates the affordability crisis even more.”
Developers working on affordable housing projects can’t work in a vacuum. They need to be able to take on debt, use tax credits and may need federal or state subsidies.
Thompson pointed out that developers “are fighting against time and money” and need to be able to control costs to get more projects onto the ground. “So we have to be really creative when we put deals together and we try to get projects built,” she said.
As an example, she cited the redevelopment of the former Brooks Air Force Base in San Antonio, Texas — a project that used Walker & Dunlop’s Low-Income Housing Tax Credit (LIHTC) equity and debt platform. One of the city’s governmental entities is the general partner and owns the land.
“What that does is it brings down the cost to build. As the city is part owner, it allows the project to be exempt from sales and property taxes,” Thompson says. “And it brings down the cost to operate that project over time, which makes it viable for the developer to be able to restrict the units to affordable housing.”
For the San Antonio project, Walker & Dunlop facilitated a $69 million Fannie Mae debt loan and nearly $60 million in tax credit equity.
“It takes a lot to get all of that done. But the result is the city of San Antonio is going to have 600 more units of affordable housing,” Thompson said.
Growth presents housing challenges
Denver’s Johnston noted that affordable housing is the biggest challenge facing his city.
“We’re delighted to have a city that is growing fast and in high demand,” he said, noting that Denver is the second most sought-after city for young people to move to. “But that means we see housing prices going up dramatically right now.”
It’s estimated that about half the renters in Denver can’t afford to live there based on the fact that more than 30% of their income must go to rent.
“We’re working hard to try to meet what we know the total housing gap is right now, and that’s about 45,000 units or so over the next 10 years,” Johnston said.
His proposed a sales tax to raise money for affordable housing was defeated in 2024, but he said that’s just driving local leaders to get more creative.
Production of affordable housing units has risen from about 1,500 a year to 3,000 a year. “That’s new construction, that’s preservation, that’s conversion, that’s rental subsidies — everything we can do to make it more affordable for Denverites to be able to live and work here,” Johnston said.
He echoed several of the points made by Thompson about the need to develop unique strategies that create equitable solutions for developers as well as the city and its residents.
That might mean Denver has to help finance units up front. Private-public partnerships are “the only path,” Johnston said.
“The problem is too big to solve with any public government trying to solve it on their own,” he said. “You have to be able to partner with the market to make this work.”
Moving forward
While high interest rates remain an issue, Thompson sees various encouraging signs. Her company works with developers and others to find solutions.
“We’re seeing consolidation in this space, where people that have never been in affordable housing are reaching out and saying, ‘We want to do this. We want to understand it,’ ” she said, adding that Walker & Dunlop does a lot of education involving affordable housing.
Although there are many questions about what will happen in Congress with various tax credits, Thompson said she’s “absolutely” optimistic about the future. “There’s still work to be done.”
Learn more about how organizations and government leaders are working to solve the affordable housing crisis on our Balancing the Housing Equation 2025 event page.
