Social Housing Overview
Executive Summary
As cities across the U.S. grapple with the growing barriers to homeownership, including limited supply and affordability, one of the proposed solutions is social housing. The objective of this report is to understand how social housing programs have been structured across the United States and what outcomes have been achieved thus far. This includes:
the potential creation of a single source housing entity,
a brief description of the latest ‘social housing’ models, and
potential governance/transparency protections for a nonprofit housing corporation, along with potential benefits, impediments, and legal restrictions that may arise.
Most metropolitan areas face both housing rental and ownership gaps, with renters particularly impacted by rising rents. Contributing factors to these gaps include demographic growth, strong in-migration from the region’s role as a global gateway destination, and below average rates of housing construction.
Cities have implemented several policy tools to address these challenges, including a surtax and documentary stamp program, inclusionary zoning ordinance, an affordable housing master plan, federally and locally financed initiatives, and strategies such as land donations, density bonuses and expedited permitting. Some states have moved over the past several years from largely grant-based programs toward an incentive-driven strategy that includes direct funding, regulatory preemption, tax incentives and developer subsidies.
Social housing development, also known as mixed-income, publicly owned development, has emerged as one solution to the shortage of housing units and development. Benefits of this strategy include longer-term housing affordability and improved conditions for low-income housing. Differences between social housing and traditional public include exclusively local financing, cross subsidization to allow mixed-income tenants, amenities more akin to market-rate private development, leveraging of public land, tax abatements and exemptions, flexible project procurement, and joint ventures with private developers. Potential downsides to social housing include governance and management challenges, financial sustainability risks, and the risk of too narrowly defining social housing’s development and resident parameters.
Social housing initiatives launched in the U.S. relatively recently, the first in 2021 in Montgomery County, Maryland. The Montgomery County model blends low-cost revolving funds, majority public ownership, tenant protections, and layered subsidies. A key element is longstanding project development capacity while reducing dependence on often cost-escalating private equity.
Other examples of social housing can be seen in Atlanta, Seattle, Chattanooga, and Chicago, while other cities have implemented various iterations of public housing developments, including Boston and Cambridge, MA; Cincinnati, OH; and Dakota County, MN. Sun Belt states have seen rapid housing development over the past 15 years as a result of pro-development housing policies, fiscal incentives, and more permissive land use regulations.
As cities consider implementing a social housing program, several best practices can be leveraged as a pathway to faster and more streamlined success:
Establish a social housing development entity empowered with certain authority, a streamlined project management process, and supported with initial grant funding;
Create a revolving loan housing production fund, providing mezzanine-level loans, targeting mixed-income developments, and creating long-term financing models;
Identify public lands to leverage, using land as equity contributions to lower upfront costs and prioritizing climate-resilient and transit oriented development;
Set clear affordability and inclusion standards, requiring affordability at the project level, allowing a share of market-rate units, and creating a Tenant Equity Vehicle to assist with homeownership;
Protect long-term fiscal and governance stability to balance accountability and independence, limit the use of property tax abatements to protect fiscal health, and incorporate performance metrics to build credibility;
Start with a pilot program, with 2-3 pilot states to test finance structures, partnership model, and management approaches.
Introduction
Many large urban areas are facing a deepening housing affordability challenge particularly for low- and moderate-income residents. With limited housing supply and a high demand for homeownership, traditional affordable housing tools have struggled to keep pace with demand, as federally funded housing finance tools are oversubscribed. In this context, social housing, broadly defined as publicly or community-owned housing provided at below-market rents, offers a potential complement to existing strategies. Across the U.S. and globally, social housing has re-emerged as a policy framework that centers long-term affordability, public stewardship, and equitable access to housing.
As states, regions, and cities consider how to meet the long-term housing needs of their residents, social housing presents an opportunity to reimagine the role of the public sector in shaping equitable development. These opportunities come with risks that should be assessed in proceeding with any large-scale effort. This report outlines actionable paths forward to expanding the supply of affordable, government owned housing and improved housing outcomes for residents across the income spectrum.
Social Housing Policy Description and Funding
With the shortage of housing units and development across the country, state and local governments have sought new ways of addressing the shortfall and subsequent housing affordability crisis. Social housing development has emerged as one solution.
Characteristics of social housing include state or local government ownership, financing, development, and management of housing developments that allow for mixed-income residents at various AMIs to pay up to 30% of their gross annual income in rent, and include some units offered at market rates. These developments often sit near public transit lines and may be outfitted with amenities typical of private developments. What allows for higher quality development at lower rents is the state or local government subsidies in the form of public land grants, property tax abatements, or low-cost financing through government bond issuances.
Benefits of public development include:
long-term affordable housing,
Improved housing conditions for low-income tenants,
Evaluation of existing local land use,
Lower cost of capital through financial tools available to government entities, and
Flexibility in incomes served.
These benefits have outweighed the potential downsides to date, although social housing as a model only began in 2021. The risks to this model are based on the history of public housing in the U.S., and the management of public infrastructure and cyclical political interruptions on long-term public investments. These include:
operating costs that exceed revenues,
governance challenges,
deferred maintenance and capital expenditures,
ongoing need for public funding, and
shifts in political will for social housing.
The modernization of government-owned housing can make social housing more sustainable. Public housing development began under the Housing Act of 1937 during the New Deal and was expanded by the Housing Act of 1949. Characteristics of public housing constructed as a result of this legislation and why the model has faltered include:
poor construction,
residents only at low incomes – 30%, 50%, or 80% of area median income (AMI),
locations in economically depressed, racially segregated areas,
financed exclusively through federal funding and rents,
operating costs that could not be maintained by rent capped at a percentage of AMI,
no resident input into the management and maintenance of the developments, and
housing conditions that became severely distressed.[1]
The stock of public housing has declined while conditions have moderately improved. This is despite various efforts to capitalize public housing to improve conditions, such as HOPE VI, Choice Neighborhoods and Rental Assistance Demonstration (RAD).
Another model, federally subsidized affordable housing development, has surged across the country, particularly after the Great Recession. Affordable housing is typically defined as housing costs that represent up to 30% of a household's gross annual income. Challenges with federally subsidized housing financing mechanisms and the development model include a reliance on limited federally subsidized programs like the Low-Income Housing Tax Credit (LIHTC), difficulties closing financing gaps, and a reliance on private developers to initiate developments.
Opposition to affordable housing development has been widespread. Much of this opposition stems from the concentration of low-income housing and concerns associated with traditional public housing developments. Social housing has the chance to avoid community opposition through higher-quality construction, amenities akin to private developments, and a mixed-income model.
Social Housing Characteristics
The new social housing model that has been popularized by the Montgomery County, MD, initiative can be described as government-owned mixed income development. These projects have several similar characteristics that set it apart from traditional public housing or traditional affordable housing.
1. Local Financing: Financing development through local governments (with a resulting ownership stake) is a key tenant of social housing. Similarly, these projects do not typically leverage federal funding programs like LIHTC to finance their projects. LIHTC, Private Activity Bonds, and Housing Choice Vouchers are all typically oversubscribed, which has likely been the impetus for the adoption of creative local funding structures.
Revolving Loan Funds: Typically funded by a city or county bond issuance, a revolving loan fund allows for the re-use of public funds to finance housing developments. The loans may fund a 3-to-5-year construction loan that serves as low-interest mezzanine financing that takes the place of private equity. These loans carry interest rates of around 5-6%, as opposed to the 15-20% returns often required by private equity. The local contribution may comprise 20-25% of the construction capital stack. This model has been used by Montgomery County, MD, Chicago, IL, and Chattanooga, TN.
Long-term Funding: Housing authorities pursuing social housing developments through subsidiaries can leverage FHA risk share financing programs to provide long-term lower costs of capital.
2. Mixed-Income Tenants/Cross-Subsidization: Different from traditional public housing and from some affordable housing developments, social housing projects use cross subsidization of requiring a diversity of tenant AMIs. Many developments require at least 30% of units built to be set aside for AMIs below 80% and 50%, with some developments setting an upper bound of 120% AMI while others lease the majority of the units at market rates. This solves one of the issues with traditional public housing in that it ensures that rents will be able to cover ongoing operating and maintenance costs.
3. Characteristics of Developments: In opposition to traditional public housing, which was constructed in low-income, economically depressed areas using the most inexpensive materials possible, social housing often mimics market-rate private development. Developments in Montgomery County, MD, have amenities like pools and clubhouses and are often located near public transit lines. The Center for Geospatial Solutions at the Lincoln Institute of Land Policy projected that governments own over 230,000 acres of land near public transit [2] – ideal for social housing development.
4. Leverage Public Land: Local jurisdictions can identify land they own to be used, leased, or sold for public housing development. This public land contribution lowers the capital needed up front for a project and often repurpose existing city-owned structures. The City of Atlanta identified $700 million in public lands to be redeveloped prior to launching their public housing subsidiary.
5. Tax Abatements and Exemptions: Some public housing authorities have the ability to exempt public housing developments from property taxes. This tool allows housing authorities to lower ongoing operating costs but must be balanced with the government’s fiscal stability.
6. Flexible Project Procurement: As part of or affiliated with local government, these housing organizations are able to help streamline the entitlement and zoning processes, which are often causes of delays and cost overruns for housing development projects. A more flexible approach to procurement is being used in Atlanta – known as request for qualifications (RFQs). This is a simpler process than issuing a request for proposals (RFP), which often require a significant time investment from the applicant.
7. Public Ownership and Management: Public majority ownership in housing developments is established typically through joint ventures with private developers in which the government entity has at least a 51% stake in the development. Public ownership is important to ensure that in the long run the units deemed affordable are kept at affordable rates depending on area median income at the time. The government entities leverage public land, low-cost access to capital, and management of the developments as equity.
Downsides to Social Housing
The benefits of social housing include longer-term housing affordability and improved conditions for low-income housing. Policymakers and developers and communities also must navigate downside risks and tradeoffs. These risks vary depending on the model, governance structure, and local context, and primarily include:
1. Governance and Management Challenges
Underfunded and deferred maintenance: Public housing agencies often rely on government funding that may be deferred or insufficient, leading to deteriorating property conditions (e.g., New York City's $40 billion repair backlog).
Poor asset management: Publicly owned social housing can suffer from bureaucratic inefficiency, inadequate staffing, or weak tenant engagement practices.
Political turnover: Social housing models dependent on political support may shift with administrations, creating uncertainty in long-term planning or investment.
2. Financial Sustainability Risks
Limited rent revenue: Unlike market-rate developments, social housing rents are often pegged to income (e.g., ≤30% AMI), meaning operating revenue may be insufficient without long-term subsidies. Uncertainty exists as to whether the mixed-income social housing model can manage this in the long term.
Overreliance on cross-subsidization: In mixed-income models, the success of affordable units may depend on demand and revenue from higher-income tenants, which can fluctuate with the economy or local housing market.
3. Policy Tradeoffs
Eligibility cliffs: Income cutoffs for eligibility (e.g., ≤60% AMI) can disincentivize income growth or make it hard for tenants to transition to unsubsidized housing.
One-size-fits-all models: Applying uniform design or affordability criteria can result in mismatches between housing type and household preferences or local demand.
4. Community and Political Resistance
Local opposition: Even when social housing is well-designed and integrated, proposals may face resistance from existing residents with potential concerns that include property devaluation, increased density, or crime.
Social Housing Projects Across the U.S.
The first major social housing initiative in the U.S. launched in 2021 through the Housing Opportunities Commission of Montgomery County, Maryland. This builds off the European model of social housing which has been in place over the past few decades, with the Vienna model exemplifying the model’s success abroad. Due to the structural differences between how the U.S. and many European countries approach taxation and social safety net programs, only U.S.-based social housing will be addressed in this report.
Montgomery County, Maryland
The Housing Opportunities Commission (HOC) of Montgomery County serves as the county’s public housing authority, housing finance agency, and public developer. Governed by a volunteer commission appointed by the County Executive and confirmed by the City Council, HOC manages both federal subsidies and a local development program. With a staff of about 17 in its real estate division, HOC has extensive experience in developing mixed-income housing and retains developer fees while hiring general contractors to build projects.
At the core of its model is the Housing Production Fund (HPF), a $100 million revolving construction financing tool created in 2021 and expanded in 2022. The HPF replaces private equity, which typically demands 15–20% returns, with loans at a 5% return requirement. These loans usually cover up to one-third of development costs, reducing the financial burden and risk. Unlike most affordable housing strategies, the financing does not rely on Low-Income Housing Tax Credits (LIHTC), volume cap, project-based rental assistance, project-based vouchers, or local housing trust funds. Instead, the HOC retains majority ownership and control of developments, ensuring affordability, enhanced tenant protections, and access to wrap-around resident services. Over the next 20 years, the HPF is expected to finance up to 6,000 new units (about 3,000–6,000 depending on project scale), with the bonds fully repaid by that time, when the fund will then continue to revolve at no new cost.
The Housing Opportunity Commission’s housing strategy targets mixed-income, mixed-use development. At least 30% of units are income restricted, with 20% affordable to households at or below 50% AMI and 10% reserved under Moderately Priced Dwelling Unit (MPDU) guidelines (65–70% AMI). A typical HPF project delivers about 300 units, of which 100 are affordable. HOC often leverages publicly owned land, lowering development costs by 10–15%, though it also acquires sites at market rates. Its dual role as both housing authority and housing finance agency (owning 9,000 rental units and having financed 4,000 affordable units for other developers) allows it to issue long-term Federal Housing Administration risk-share loans, access property tax exemptions, and reduce impact fees, while providing a pipeline of 13 active projects.
Beyond financing, HOC’s public status creates multiple advantages: property tax exemptions, reduced insurance costs via self-insurance, expedited approvals, and faster lease-up of affordable units. HOC can also intervene in stalled private developments, incorporating affordability while sustaining long-term ownership. Its flexible $210 million credit lines with PNC Bank further enhance its ability to act quickly as either a developer or lender.
Overall, Montgomery County’s HOC demonstrates how local governments can scale mixed-income housing production without relying on LIHTC. By blending low-cost revolving funds, majority public ownership, tenant protections, and layered subsidies, the model shows how counties can reduce dependence on private equity while still meeting pressing housing needs. Another key to their success is their long-standing project development capacity.
Atlanta, Georgia
The City of Atlanta has launched a public housing initiative through the Atlanta Urban Development Corporation (AUDC), a subsidiary of the Atlanta Housing Authority. Established in 2023 following the work of the Affordable Housing Strike Force, which was a whole-of-city effort to align on and identify potential housing redevelopment projects, the AUDC reflects a social housing model that leverages public land and public finance to expand affordable housing while maintaining public ownership.
The AUDC operates with an independent 11-member board of directors, appointed primarily by Atlanta Housing Authority, with at least four members also serving on the Atlanta Housing Authority’s board. Four ex officio members include the mayor (or designee), the City Council’s Community Development chair, the CEO of Invest Atlanta, and the CEO of Atlanta Housing. While AUDC is structurally independent, it is closely linked to both the City and Invest Atlanta, which provide seed funding, financial oversight, and debt issuance capacity. As an incorporated subsidiary of Atlanta Housing, the AUDC can issue bonds, own property, and grant property tax exemptions, but typically relies on the City or Invest Atlanta to issue debt on its behalf.
The Atlanta Urban Development Corporation leverages a layered financing model to reduce costs and ensure long-term affordability. In 2023, Atlanta funded a $38 million Housing Production Fund (HPF) through its Housing Opportunity Bond program. This HPF provides low-interest, mezzanine-level construction loans covering up to 20% of a project’s capital stack for up to five years. Combined with public land contributions (5–10% of project costs), limited private equity (5–10%), and conventional construction loans (roughly 60%), the HPF reduces overall development costs while replacing traditional reliance on LIHTC equity. AUDC projects can also access property tax exemptions through Private Enterprise Agreements, allowing for 100% exemptions up to 140% AMI units—an advantage unique to Georgia public housing authorities. Additionally, tax-exempt municipal bonds and future Tax Increment Financing tools are being explored for permanent financing.
By 2030, Atlanta aims to build and preserve 20,000 affordable units, with AUDC at the center of that effort. Projects are required to reserve at least 20% of units affordable to households at or below 50% AMI and 10% at or below 80% AMI, with some developments also incorporating affordable homeownership. Market-rate rents are used strategically to cross-subsidize affordability, while the public land and financing structure lowers upfront costs. Importantly, all projects are designed for mixed-income, mixed-use communities with long-term affordability locked in through public ownership and stewardship.
The AUDC has already issued requests for qualifications for redevelopment projects at Fire Station 15 and Thomasville Heights, both structured without LIHTC. Early projects are testing variations in equity stakes and financing structures, balancing scalability with risk management. AUDC prioritizes maintaining a controlling stake in projects, but equity allocation may vary based on risk and affordability levels—retaining more control in workforce housing projects, while sharing equity in riskier mixed-income developments. The model depends on three core inputs: public land, public investment, and development capacity. By combining these, AUDC is building a scalable pathway for cities to transform underutilized public assets into affordable, sustainable, and community-driven housing.
Seattle, Washington
Seattle is one of the first U.S. cities to adopt a formal social housing model through a citizen-led initiative. In February 2023, voters approved Initiative 135, creating the Seattle Social Housing Developer, an independent public entity with the mission of developing, owning, leasing, and maintaining permanently affordable housing for households earning up to 120% of area median income (AMI). Seattle faces an estimated need for 112,000 new housing units by 2044, including 71,000 units affordable to households below 80% of AMI, 11,500 units up to 120% of AMI, and 30,000 units for households above that threshold. With Seattle’s AMI currently at $116,068, the initiative aims to bridge the gap for working- and middle-class households priced out of the private housing market.
In February 2025, voters again backed the program by approving Proposition 1A, which established a 5% excess compensation tax on employers for every Seattle-based employee earning more than $1 million annually. This new payroll tax, which will begin collections in 2026, is expected to generate about $50 million annually for land acquisition, construction, and administrative costs of the social housing program. Proposition 1A prevailed over the City Council–referred Proposition 1B, which would have reallocated $10 million annually from an existing payroll tax and restricted eligibility to households below 80% of AMI. Voter support for Prop 1A was strong, with 63% in favor, reflecting broad public backing for a more expansive social housing model.[3]
Despite its momentum, the initiative faces governance and implementation challenges. The Social Housing Developer currently employs only a CEO, with limited funds to hire staff until tax revenues begin. Some board members have resigned over conflicts with leadership, and the effort continues without the active support of the mayor or city government.[4] Business interests, led by the Seattle Metropolitan Chamber of Commerce and supported by corporations like Amazon, Microsoft, and T-Mobile, spent heavily opposing the new tax. Critics argue the tax could deter high-wage employers, while supporters see it as a bold and necessary approach to addressing Seattle’s acute housing affordability crisis.
Chicago, IL
Chicago has modeled its Green Social Housing Revolving Loan Fund after the Montgomery County and Atlanta models. A $135 million bond was issued by the city in 2024 to provide the seed funding, and the ordinance to establish the fund recently passed a vote by City Council in May 2025. Much of the structure for the program is not yet in place for this reason. What is unique about Chicago’s program is its focus on environmentally sustainable building practices.
Chattanooga, TN
Invest Chattanooga, a public enterprise launched by the City of Chattanooga and subsidiary of the Chattanooga Housing Authority (CHA), administers a $20 million revolving loan fund through the Housing Production Fund that was created in 2022. The organization is a 501(c)(3) that is financially and operationally independent from CHA with its own board in order to have flexibility in its operations to meet market demands. The organization’s board of directors is comprised of real estate developers, city government and philanthropic leaders, while Invest Chattanooga is led by someone with a decade of housing policy experience who helped launch the Atlanta Urban Development Corporation.
Similar to other cities, this is modeled after Montgomery County’s and Atlanta’s social housing program in that the low-interest rate loans will cover mixed-income development construction costs at up to 25% and require that 20% of the units are affordable at 50% AMI and 10% of the units affordable between 50-100% AMI. Other incentives offered include the PILOT program, which is a payment in lieu of taxes, property tax abatement, lower-cost senior loans, and the city intends to identify publicly owned land that can be leveraged, as well as identifying potential philanthropic partnerships. Invest Chattanooga will hold majority ownership in the projects.
Invest Chattanooga issued a Request for Information (RFI) looking for development partners with shovel-ready projects that are on hold due to high financing costs or for multifamily acquisition opportunities. The RFI lists the following public development tools:
below-market senior debt through Freddie Mac Tax Exempt Loans, Community Investment Tax Credit loans, and HUD 223(f) loans, up to 300 basis points below market rates;
low-cost construction financing that will cover up to 25% of the total development cost;
common equity;
below-market mezzanine debt through a partnership with impact investors;
property tax relief through the PILOT program; and
project-based rental assistance through long-term project vouchers from the Chattanooga Housing Authority to create affordable housing for households below 30% AMI.
Several other government entities have implemented various versions of public housing developments, including Boston and Cambridge, MA; Cincinnati, OH; Hawaii; and Dakota County, MN. The breadth of these programs does not match the breadth of the Montgomery County model, but they are working towards the similar goal of expanding affordable housing. Some characteristics of these programs include:
Redevelopment of aging public housing stock through federal financing programs like LIHTC, private activity bonds, project-based vouchers, and HUD’s Faircloth-to-RAD programs.
These developments will be mixed-incomed on publicly owned land but will not necessarily be publicly owned.
Operations lie under existing public housing authorities.
Colorado’s housing program under Proposition 123 is a unique statewide initiative with significantly more annual funding that is allocated to a broader spectrum of housing programs. In 2022, the state’s voters passed a proposition that earmarks 0.1% of state income tax collections for housing initiatives, which will generate over $300 million annually. This funding is allocated to two separate programs:
Affordable Housing Support Fund: Managed by the State’s Division of Housing, this fund will support homelessness programs, promote affordable homeownership, and assist in local planning.
Affordable Housing Financing Fund: Managed by the State’s economic development office in partnership with the Colorado Housing Finance Authority, this funding is allocated for:
a land banking program:
15-25% of total funding,
For acquisition or preservation of land for affordable high-density, mixed-income homes,
Up to 60% AMI for rentals and 100% AMI for homeownership.
a concessionary debt program
15-35% of total funding,
Provides gap financing for LIHTC projects and other multifamily rental development for up to 60% AMI,
Offers debt financing for modular housing as well.
an equity program:
40-70% of total funding,
For below market equity investments in new mixed income housing developments for up to 90% AMI,
Establishes a Tenant Equity Vehicle to allow tenants to tap into the equity in their buildings after one year of tenancy and on-time rent payments for cash allowances for future downpayments.
Social Housing Program Comparison
| Montgomery County, MD | Atlanta, GA | Chicago, IL | |||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Managing Organization | Housing Opportunities Commission | Atlanta Urban Development Corporation which is a subsidiary of Atlanta Housing | The Residential Investment Corporation | ||||||||||||||||||||||||||||||||||||||||||||
| Characteristics |
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Sun Belt Housing & Alternatives to Social Housing
Most social housing initiatives have sprung up mostly in large, coastal cities with some exceptions. While these cities have faced the most significant housing challenges, many cities across the south and the Sun Belt are faced with new housing challenges which they have not previously encountered.
The COVID-19 pandemic resulted in a significant increase in home prices across the country as anemic new home supply faced increased demand. In sunbelt cities, demand for more moderately priced homes remained steady, since many communities have flexible zoning and land use policies to incentivize new construction.
The Case Shiller Home Price Index provides a history on changes in residential home prices in twenty large metropolitan areas. In comparing Dallas, Phoenix, and Atlanta, home prices in Phoenix and Dallas shared similar growth patterns through the 2010s until Phoenix’s home prices surged after the COVID-19 pandemic. When considering population growth from 2001 through 2024, the housing price growth shows where supply has kept up with demand. Reflective of their home price trends, Dallas, Phoenix, and Atlanta grew by 56%, 53%, and 40%*, respectively. [Source: U.S. Census Bureau data by Metropolitan Statistical Area pulled from the FRED data]
*Atlanta population growth is through 2022 instead of 2024.
Many cities across this region have relied on traditional public and affordable housing strategies. The social housing program in Atlanta is described above and is the second largest social housing program to date in the U.S. Phoenix has not adopted social housing but has faced challenges with affordable housing developments. The Chandler (part of metro Phoenix) Sonoran Landings affordable housing project was initially proposed in 2022 for over 500 affordable units before scaling back to 272 units for only seniors and veterans. The project faced long delays and opposition from the community, which has cited a concern for increasing crime and traffic, as well as for the availability of water. The project has since been scrapped, in part because the county board denied it access to utilities, and the land is set to be sold.
The metro Dallas area has long been hailed as a model for expansive housing development and sprawl. The suburbs of Dallas now sit an hour’s drive from the city’s center. Flexible housing and zoning policies allowed the area to maintain strong housing growth. Generous economic development incentives paired with no state income tax, and an abundance of relatively inexpensive land attracted business headquarters and with them, thousands of new residents. Housing costs have maintained moderate growth in the suburbs relative to other large metro areas, but the City of Dallas lacks affordable housing in some regions. The City has established a Mixed Income Housing Development Bonus to incentivize the development of affordable housing, such as height, floor area ratio, density, and reduced parking minimums. The city also requires any residential development in Tax Increment Financing (TIF) Districts to include affordable units at 30% of 80% AMI.
Sun Belt Housing Policies
The rapid housing development in Sun Belt states since the 2010s is the result of a combination of pro-development housing policies, fiscal incentives, and less restrictive land use regulations. Below are the major housing policy levers that have fueled this growth:
1. Permissive Zoning & Land Use Flexibility
Low zoning barriers: Many Sun Belt cities (e.g., Houston, Dallas, Phoenix, Tampa) have few or no traditional zoning codes and/or reduce delays for approvals.
Greenfield expansion: These states have historically allowed rapid annexation of undeveloped land, enabling suburban sprawl and master-planned communities.
2. State & Local Tax Incentives
Low taxes: The absence of a state income tax (in states like Texas and Florida) and business relocation incentives make these states attractive to investors, developers, and in-migrants, driving housing demand and production.
Impact fee incentives: Localities have used impact fee waivers or deferrals to encourage developers to build faster and cheaper.
Tax Increment Financing (TIF) and property tax abatements for multifamily housing are common in fast-growing Sun Belt metros.
3. Private-Sector Innovation and Public-Private Partnerships
Build-to-Rent (BTR) growth: Sun Belt states have facilitated large-scale single-family rental developments through lenient land use laws and minimal restrictions on investor-owned housing. Arizona and Texas lead the nation in BTR communities.
Public Facility Corporations (PFCs) in Texas: Enable partnerships between local housing authorities and private developers to build mixed-income housing that receives property tax exemptions.
4. Streamlined Permitting & Preemption of Local Control
Fast permitting processes: Many cities and counties offer expedited permitting and reduced regulatory review for affordable housing developers.
State preemption: States like Florida and Texas have passed laws preventing localities from enacting rent control, restrictive zoning, or development moratoria, removing key roadblocks to construction.
Alternative Affordable Housing Models
While social housing is emerging as an alternative to traditional public and affordable housing development, not all communities are prepared to implement a program that requires such a long-term commitment. Below are a few alternative strategies to expand the housing supply, which helps to create more naturally affordable housing, to meet the needs of various communities.
Build‑to‑Rent (BTR) Developments
While not government social housing per se, private build‑to‑rent (BTR) projects are delivering mixed-income and quasi-affordable rental communities. Build-to-rent properties are often concentrated in a community and are owned and maintained by builders or investors. Because they are new construction, appliances are under warranty and require less maintenance. The developments create economies of scale for developers, since floorplans are standardized.
Approximately 131,000 build-to-rent units were built between 2019 and the beginning of 2023 and 112,000 units in development.[5] These developments are geographically located where there is space to build new communities, such as Texas, Arizona, Florida, North Carolina, and Georgia. While research on this model is limited, benefits include increasing the housing supply, economies of scale in development, and providing single-family rental properties for people who do not want to or cannot afford to purchase a home.
Middle Housing
Middle housing refers to housing types that fall between single-family homes and large multifamily apartment complexes, such as townhomes, duplexes, triplexes, fourplexes, cottage courts, and cluster homes. Despite strong demand, these options are largely absent from today’s housing stock. In most U.S. cities, zoning restrictions prohibit any housing other than single-family, detached homes on roughly 75% of residential land.
Middle housing offers a pathway to increase housing supply while creating more socioeconomically diverse neighborhoods. These smaller-scale developments are compatible with existing residential areas, making them ideal for infill projects that add density without dramatically altering neighborhood character. Importantly, middle housing aligns with strong consumer demand: nearly 60% of millennials and over one-quarter of baby boomers report interest in walkable communities, which is a key feature of middle housing designs.
Expanding middle housing reduces rent burdens, broadens access to better neighborhoods, and encourages pathways to homeownership at lower price points. This could help stabilize communities facing rapid gentrification and displacement pressures. Expanding homeownership opportunities is particularly critical for reducing racial disparities in wealth, as Hispanic and Black households in the county face homeownership rates 15–20 percentage points lower than white households.
Social Housing Takeaways
As local jurisdictions consider whether to adopt social housing programs, several lessons can be derived from the experience of existing social housing programs. Given the experience of several municipalities, creating a task force like Atlanta’s and gaining alignment from stakeholders (county, cities, developers, PHA, HFA, etc.) before launching and raising funds sets the program up for faster success.
1. Establish a Social Housing Development Entity
This could be a subsidiary of the local Housing Finance Authority as a quasi-governmental entity not directly under the county government.
Empower it with the ability to:
issue bonds and manage a revolving housing production fund,
lease or redevelop county-owned land,
enter joint ventures with private developers while maintaining at least 51% ownership, and
offer property tax abatements and pilot agreements where fiscally sustainable.
Create a streamlined project management process that is responsive to the market, similar to Atlanta’s RFQ process.
Provide grant funding.
2. Create a Housing Production Fund
Capitalize a revolving loan fund with $50–100 million in bond proceeds to start, potentially matched with state funds or philanthropic contributions.
Provide mezzanine-level loans (5–6% returns, 3–5-year terms) that replace private equity in the construction capital stack.
Target mixed-income developments of 200–400 units each, reserving at least 30% as affordable units. This could be new development, development in progress that requires additional financing, or shovel-ready projects.
Create long-term financing models for each development to ensure the appropriate level of ongoing revenue required to meet operating demands and ensure buildings will be well maintained.
3. Identify Public Lands to Leverage
Determine whether to leverage only unincorporated land in the city or county or work to partner with municipalities and leverage their land as well.
Begin with a list of underutilized county-owned parcels near public transit and major employment centers.
Use land as equity contributions to lower upfront costs by 10–20%.
Prioritize climate-resilient, transit-oriented development.
4. Set Clear Affordability and Inclusion Standards
Require affordability at the project level:
20% of units ≤50% AMI
10% of units 50–80% AMI
Allow a share of market-rate units up to 120% AMI to strengthen cross-subsidization.
Incorporate wraparound services (childcare, workforce, healthcare partnerships) to enhance stability.
Consider creating a Tenant Equity Vehicle similar to Colorado’s to assist with future homeownership.
5. Protect Long-Term Fiscal and Governance Stability
Establish governance through a diverse board (housing/development experts, community/nonprofit representatives, business/economic stakeholders, government officials) to balance accountability and independence.
Limit the use of property tax abatements to avoid undermining fiscal health or consider partial abatements or time-limited exemptions.
Report on performance metrics (units delivered, affordability mix, repayment rates, tenant outcomes) to build credibility and the case for ongoing funding and development.
6. Consider Starting with a Pilot Program
Select 2–3 pilot sites.
Test financing structures, partnership models, and management approaches.
If these are successful, the program can expand funding and the project pipeline to produce 10,000+ units over 20 years, similar to Montgomery County’s trajectory.
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