The affordable housing industry faces significant headwinds from escalating construction costs and policy uncertainty, yet professionals remain optimistic about development growth in 2026, according to a new survey from TD Bank.
Conducted among 238 industry professionals at the Governor’s Conference on Housing and Economic Development, the survey highlights a divided outlook driven by market challenges and strong community needs.
Half of affordable housing professionals surveyed anticipate that market challenges will negatively impact their deal pipelines in 2026. The primary barriers cited are:
- High construction costs (55% of respondents)
- Price increases from tariffs (39% of respondents)
As a result of these pressures, only 29% of professionals plan to expand housing developments next year.
Policy shifts are also a major concern, particularly those affecting lending and borrowing costs. A striking 60% of respondents believe proposed changes to the Section 8 Housing Choice Voucher Program will influence their development plans, with 84% of those expecting a negative impact from the updates.
Despite the cost and policy concerns, a significant portion of the industry remains confident about the future.
- 52% of professionals are confident that access to affordable housing will expand in 2026.
- Nearly two-thirds (62%) expect overall development to rise.
The strongest projected demand is focused on three critical segments:
- Multi-family housing (64%)
- Housing for seniors/elderly populations (58%)
- Workforce housing for essential and middle-income workers (50%)
“In this current environment, the greatest opportunities lie in meeting affordable housing needs in the communities we serve,” Hugh Allen, executive vice president and head of US Commercial Real Estate at TD Bank said. “Segments like multi-family housing represent not only critical community needs, but also areas where strategic investment and collaboration can drive meaningful growth.”
With access to capital being a top concern, affordable housing professionals identified specific ways financial institutions can provide the most essential support to keep projects moving:
- Dedicated affordable housing lending programs or teams (27%)
- Flexible lending terms (26%)
- Bridge financing or gap funding solutions (25%)
Allen emphasized the bank’s role in providing solutions. “As an equity provider through our purchase of Low-Income Housing Tax Credits or through the provision of construction financing, tailored capital solutions by TD Bank can be the difference between stalled projects and much-needed affordable housing.”
