TD Bank survey finds optimism for affordable housing growth despite cost and policy headwinds
Affordable housing professionals are bracing for a turbulent 2026, as rising construction costs and shifting policy landscapes threaten to slow development, according to a new survey by TD Bank.
The findings, based on responses from 238 industry participants at the Governor’s Conference on Housing and Economic Development in Atlantic City, revealed that half of respondents expect market challenges to impact their deals next year.
High construction costs topped the list of concerns, with 55% of professionals identifying them as the biggest barrier to new projects. Tariff-driven price increases followed, cited by 39% of respondents. As a result, only 29% of those surveyed planned to expand their affordable housing developments in 2026.
Yet, 52% expressed confidence that access to affordable housing would expand in 2026, and nearly two-thirds (62%) anticipated a rise in development activity.
The strongest demand was projected for multi-family housing (64%), senior housing (58%), and workforce housing for essential and middle-income workers (50%).
CoStar Group has dialed back its near-term forecast for the United States multifamily sector, projecting a slight dip in national apartment rent growth and persistent vacancy rates through 2026.
Meanwhile, the latest Multifamily Market Survey (MMS) from the National Association of Home Builders (NAHB) showed the Multifamily Production Index (MPI) rising to 46 in the third quarter, up six points year-over-year but still below the neutral mark of 50.
“In this current environment, the greatest opportunities lie in meeting affordable housing needs in the communities we serve,” said Hugh Allen, executive vice president and head of US commercial real estate at TD Bank.
“Segments like multi-family housing represent not only critical community needs, but also areas where strategic investment and collaboration can drive meaningful growth.”
Policy changes are also weighing heavily on the minds of industry professionals. Sixty percent of respondents said proposed updates to the Section 8 Housing Choice Voucher Program would influence their development plans, with 84% of those anticipating a negative impact.
Access to capital remains a top priority, with professionals calling for dedicated affordable housing lending programs (27%), flexible lending terms (26%), and bridge financing solutions (25%).
“With all eyes on development pipelines, financial partnerships are critical to keeping growth on track and delivering the housing our communities urgently need,” Allen said.
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