{"id":187215,"date":"2026-03-17T11:45:36","date_gmt":"2026-03-17T17:45:36","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=187215"},"modified":"2026-03-17T11:45:39","modified_gmt":"2026-03-17T17:45:39","slug":"housing-markets-where-affordable-housing-is-scarce","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/housing-markets-where-affordable-housing-is-scarce","title":{"rendered":"The Housing Markets Where Section 8 Properties and Affordable Homes Are Scarce"},"content":{"rendered":"

Does the idea of a never-ending stream of potential renters, many of them with guaranteed payments, lining up to apply for your vacant apartments sound appealing? <\/span>Then <\/span>you might want to<\/span> consider renting to lower-income tenants.<\/span><\/p>\n

Before you rush to judgment, it\u2019s worth taking a broad look at the current rental market. America\u2019s affordable rental crunch means that the biggest segment of the population that needs housing is the one that can least afford it. For landlords willing to serve this growing demographic, a golden opportunity awaits\u2014as long as it <\/span>is approached<\/span> correctly.<\/span><\/p>\n

A National Shortage That Isn\u2019t Going Away<\/span><\/h2>\n

If real estate is about supply and demand, there is an almost bottomless demand at the lower financial end of the market. The United States is short about 7.2 million affordable rental homes for extremely low renters, defined as those at or below the poverty line or 30% of the area median income, according to the <\/span>National Low Income Housing Coalition<\/span><\/a>\u2019s (NLIHC) \u201cThe Gap\u201d report. That translates to only 35 affordable and available units for every 100 extremely low-income renter households nationwide.<\/span><\/p>\n

The report shows that roughly 11 million households fall into this category, with some states having more than others. However, as Renee Willis, president and CEO of the NLIHC, said in the report, \u201cThe findings from \u2018The Gap\u2019 show that no state or major metropolitan area has an adequate supply of affordable and available homes for extremely low-income renters.\u201d She added that only about one in four households that need assistance actually receive it.<\/span><\/p>\n

Western and Sunbelt States Are the Most Affordable Housing-Challenged<\/span><\/h2>\n

According to a <\/span>Newsweek<\/span><\/a> <\/em>map based on NLIHC data, Western and Sunbelt states such as Nevada, Arizona, Florida, and Texas rank among the most challenged. The report shows that seniors, those with low-wage jobs, and people with disabilities <\/span>are often forced<\/span> to compete with higher-income tenants for modest-priced rentals.<\/span><\/p>\n

Focusing on Texas, a recent report from the<\/span> Texas Tribune<\/span><\/a><\/em> finds that Dallas\u2014<\/span>often celebrated<\/span><\/a> for its burgeoning jobs and middle-class population\u2014was short about 46,000 rental homes for families making 50% of the area\u2019s median income as of 2023.<\/span><\/p>\n

“We have a serious shortage of affordable rental units for very low-income households,” said Ashley Flores, the Dallas-based housing chief for nonprofit Child Poverty Action Lab, who coauthored its<\/span> new report<\/span><\/a>.<\/span><\/p>\n

The Problems With Section 8<\/span><\/h2>\n

Although there is a deep need for affordable housing, there is a chronic shortage of tenants approved for Housing Choice Vouchers (<\/span>Section 8)<\/span><\/a>. A<\/span> New York Times<\/span><\/a><\/em> article found that these vouchers are too scarce in major American cities where they are most needed. In Orlando, for example, there are roughly 200,000 rent-burdened households (those paying over 30% of their household income in housing costs) but only 7,401 available Section 8 vouchers.<\/span><\/p>\n

More recently, the Trump administration proposed imposing a two-year <\/span>time limit<\/span><\/a> on rental assistance, which could affect as many as 1.4 million households, exempting <\/span>the elderly<\/span> and those with disabilities.<\/span><\/p>\n

Many landlords choose to avoid Section 8 housing altogether because they feel it is too much of an administrative nightmare, requires excessive inspections, involves chasing tenants for their share of the rent, and <\/span>soaring rents <\/span>make<\/span> it easier to get top dollar<\/span><\/a> from regular tenants without the hassle of dealing with the government.<\/span><\/p>\n

Each county has its own rules<\/span><\/a> for affordable housing, and many have<\/span> programs beyond Section 8<\/span><\/a> that can also offer qualified tenants steady, market-rate rents.<\/span><\/p>\n

How Landlords Can Turn The Affordable Housing Shortage Into Cash Flow<\/span><\/h2>\n

A recent <\/span>Business Insider<\/span><\/a><\/em> story detailed the story of Ted and Jamie Gerber, who own 28 rental units across 15 commercial and residential properties in Florida. “We always rent at or below market rates,\u201d said Ted Gerber. \u201cOur tenants value the fact that they’re renting slightly below market rate, so they’re going to want to take care of the place. They’re getting a deal, and we’re still making money from it all.\u201d<\/span><\/p>\n

Another investor, Washington-based Dion McNeeley, interviewed for the same article, uses a similar strategy.<\/span><\/p>\n

“Happy tenants don’t trash the place, and they don’t move, and <\/span>tenant turnover<\/span><\/a> is one of the most expensive things a landlord has to deal with,” McNeeley said. “I’m making tens of thousands of dollars more in the last few years than I would have if I raised the rent to the area average and then dealt with a bunch of turnover.\u201d<\/span><\/p>\n

A <\/span>BiggerPockets article<\/span><\/a> outlined some of the essentials for renting to low-income tenants:<\/span><\/p>\n