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PORTLAND, Ore. — <\/span>Mathew Davis, who lives in a homeless shelter in Austin, Texas, would love an apartment of his own. But with the little money he makes donating blood plasma, even a $450-a-month tiny home<\/a> with no running water and a communal bathroom would be a stretch.<\/p>\n Meanwhile, over 4,500 units the city classifies as affordable \u2014 nearly 16% \u2014 sit empty. <\/p>\n \u201cI don\u2019t make enough money really to afford anything,\u201d Davis, 49, said of the few hundred dollars he earns a month. \u201cI just keep trying to swim uphill.\u201d<\/p>\n The poorest people in the U.S.<\/a> face the most acute shortages<\/a> of affordable homes. But the majority of low-income housing financed in recent years is for those earning 50% of an area\u2019s median income or above, according to a survey of state housing agencies. <\/p>\n Some cities are now seeing an uptick in vacancies as rents for these units approach market rates. The result: Apartments designated as affordable sit empty because the poorest of the poor<\/a> cannot afford them.<\/p>\n Meanwhile, some people are forced into homelessness and others into desperate circumstances to pay for housing they can\u2019t afford.<\/p>\n There are only about 4 million affordable rental units available for the country\u2019s 11 million extremely low-income renter households, according to the National Low Income Housing Coalition\u2019s most recent annual report<\/a>.<\/p>\n These are people with annual incomes either below the federal poverty guidelines \u2014 just under $16,000 for a single-person household \u2014 or 30% of the median income in their area, whichever is higher. They comprise about a quarter of U.S. renter households, and include many people working low-wage jobs, seniors and those with disabilities living on fixed incomes.<\/p>\n About three-quarters of extremely low-income renter households pay over half their income on rent and utilities, the report said, leaving little leftover for other necessities.<\/p>\n Yet homes set aside for these renters were only about 12% of the affordable housing units financed in 2024 by the Low-Income Housing Tax Credit \u2014 a federal program<\/a> providing tax credits to developers<\/a> in exchange for keeping rents low for at least 30 years, according to figures from the National Council of State Housing Agencies.<\/p>\n The majority are for those earning at least 50% of an area\u2019s median income, or AMI. In Austin, that\u2019s a single person earning roughly $47,000 a year, as compared with an extremely low-income person earning under $28,000. <\/p>\n The program has financed nearly 4 million affordable units nationwide since its creation 40 years ago. But some experts say it\u2019s inefficient \u2014 and more costly than housing vouchers.<\/p>\n \u201cIt\u2019s enormously complex and bureaucratic, and it raises the cost of construction enormously because the rules are so complicated,\u201d said Chris Edwards, an economist at the Cato Institute, a libertarian think tank, who told Congress<\/a> the program\u2019s complexity \u201cspawned\u201d an industry of law and accounting firms just to administer it.<\/p>\n \u201cIf you\u2019re going to subsidize affordable housing, you should give the money directly to tenants,\u201d he said, referring to housing vouchers.<\/p>\n Other experts say the two programs work together well because properties built with the tax credit are required to accept vouchers \u2014 while landlords of market-rate apartments in many states are not.<\/p>\n Still, there\u2019s a major federal funding shortfall<\/a>: Experts estimate only one-in-four eligible families ever receive vouchers. Vouchers can help the poorest pay for housing that\u2019s targeted to higher income groups, but the waitlist can be yearslong.<\/p>\n Some affordable housing developers say that without vouchers, it\u2019s not economically feasible to provide units for extremely low-income people.<\/p>\n True Ground Housing Partners, an affordable housing developer in the Washington, D.C., area, gives an example: A unit for those earning 60% of the area\u2019s median income \u2014 nearly $70,000 a year \u2014 brings in $1,715 per month in rent. But after $1,575 in mortgage and operating expenses, only $140 is left.<\/p>\n \u201cThe math does not lie,\u201d said president and CEO Carmen Romero, noting that an extremely low-income person would pay only half that rent.<\/p>\n \u201cOur expenses don\u2019t make it really possible to create a 30% AMI unit, unless there was this extraordinary amount of subsidy that just doesn\u2019t exist.\u201d<\/p>\n Meanwhile, affordable housing rents for 60% AMI units are approaching those of market-rate apartments in U.S. cities like Austin, Denver and Portland, Oregon. <\/p>\n As a result, some people are opting to pay a bit more for market-rate apartments with less income-verification and faster approval \u2014 leaving growing numbers of affordable units vacant.<\/p>\n In Austin, the vacancy rate for all affordable housing is nearly 16% with over 4,500 vacant units, according to real estate data and analytics firm CoStar. A healthy vacancy rate is around 5%.<\/p>\n LDG Development, an affordable housing developer, cited a 12% vacancy rate for its 60% AMI units in Austin. Chief portfolio officer Rebekah Fischer said LDG is \u201cin direct competition\u201d with the thousands of new market-rate apartments recently built in Austin.<\/p>\n \u201cI have to have every bank statement, every pay check, every bill, every Venmo transaction that you had with your friends,\u201d Fischer said of affordable housing applicants. <\/p>\n \u201cWhen we\u2019re almost going after the same renter, you can be approved within two minutes at a market-rate deal, where unfortunately in affordable housing \u2026 it takes time.\u201d<\/p>\n In Denver, there\u2019s a 13% vacancy rate among 60% AMI units financed by the federal tax credit program \u2014 and a 21% vacancy rate for 80% AMI units, according to the Colorado Housing and Finance Authority. Meanwhile, there is far too little housing for the city’s poorest<\/a>.<\/p>\n