Half of All-Affordable Buildings Now Losing Money Annually, Threatening Long-Term Housing Supply
The Hidden Crisis in Affordable Housing Finance
New York City’s affordable housing system is quietly reaching a breaking point, with roughly half of all-affordable buildings experiencing expenses greater than rents collected, according to a report released by nonprofit housing organizations and financing entities. This financial deterioration threatens the loss of hundreds of thousands of housing units built under decades of policy incentives designed to serve lower-income residents.
The Mathematics of Affordability Becoming Unaffordable
Those projects have seen their expenses increase 40% since 2017, far more than the increases in rents allowed by the city’s Rent Guidelines Board. This gap between operational costs and permitted rent growth creates an arithmetic that cannot be sustained indefinitely. For large affordable housing operators like BronxProGroup, one in three units are in buildings where expenses are greater than rents collected, and one in five are in buildings in such poor financial shape that owners will have to renegotiate loans to lower their risk of defaulting.
System-Wide Deterioration and Policy Constraints
About six in 10 affordable projects that have received financing help from Enterprise and the National Equity Fund have expenses that exceed their income, revealing a system-wide structural problem rather than isolated management failures. The crisis intensified following the 2019 changes to New York’s rent laws. Rent regulations make it impossible to bring apartments back to market if they need substantial work to bring them up to building standards, and insurance costs for rent-stabilized apartments climbed 150% from 2019 to 2025.
The Upstream Policy Drivers
Understanding the root causes is essential. New York’s convoluted property-tax system levies higher rates on large apartment buildings than on single-family homes, thus discouraging density and penalizing renters when the costs are passed on. Additionally, New York’s unique scaffold law imposes absolute liability on owners and contractors for “gravity-related” worker injuries, thereby inflating insurance, construction and maintenance costs.
The Political Moment and Its Implications
The problem has achieved political visibility at a critical moment. Operators and managers have stated that Mayor-elect Zohran Mamdani’s promise of an at least four-year rent freeze will make their situation worse, raising questions about whether proposed policy shifts will exacerbate or alleviate the underlying crisis.
The Stakes for the City’s Housing Future
The all-affordable housing sector is estimated to include about 300,000 units–a housing stock loss of that magnitude would represent a catastrophe for low-income New Yorkers. The crisis demands that affordable housing policy be understood not only through the lens of tenant protection but through the economics that determine whether properties can actually remain operational over decades. Failure to address these financial realities will eliminate far more affordable units than any policy that increases rents, creating a tragic irony where protection policies inadvertently destroy the housing stock they aimed to preserve.
