Affordable-Housing Projects Stalled Over Proposed Cuts to Rental Assistance

The Trump administration is proposing a $27 billion cut to federal programs that provide rental assistance to low-income individuals.

The proposed 43% cut in these programs is creating enough uncertainty that some lenders are already pulling back, stalling new affordable-housing projects.

That is the case for Jeff Fox. In June, the New York City-based real-estate developer was on track to start construction on a senior affordable-housing facility in Queens, N.Y., by the fall.

Then New York's housing-development department called with bad news. The July round for Section 8 housing subsidies was going to be "indefinitely postponed" because of a lack of HUD funding this year and the prospect of President Trump's proposed further cuts for next year.

Fox, who relies on this federal voucher program to fund his projects, said his Queens development is now on hold.

"No one knows what's going to happen, so rather than overcommit, they're pumping the brakes," he said.

The House Appropriations Committee last week removed Trump's plan to overhaul these rental assistance programs, but that has not stopped the Trump administration from pushing ahead.

The Department of Housing and Urban Development, which provides funding to local governments for low-income housing, is continuing to meet with congressional leaders to lobby for these changes, a spokeswoman said. The Senate Appropriations Committee is scheduled to conduct its own assessment of Trump’s proposed budget on Thursday.

The $27 billion cut would be part of an overall 44% reduction to HUD's budget intended to reduce government spending.

"We want to be lean and mean, not bloated and bureaucratic," HUD Secretary Scott Turner said at a June Senate hearing.

More than five million people across the U.S. use Section 8 vouchers to pay at least part of their rent. The vouchers are most heavily used in states such as New York and California, where housing costs are skyrocketing for renters and owners.

Landlords and developers say these budget cuts would reduce a crucial source of revenue for affordable apartments, making it harder to maintain and pay debt on their properties.

About $50 billion of multifamily loans purchased by Fannie Mae and Freddie Mac between 2018 and 2023 would be at risk of default, according to an analysis by the New York Housing Conference, a nonprofit affordable-housing advocacy group.

"It would be destabilizing to the entire housing system," said Rachel Fee, executive director of the New York Housing Conference.

Some affordable-housing lenders say they are already slamming on the brakes.

We're definitely gun-shy" about using HUD funding, said Deborah La Franchi, chief executive of investment fund manager SDS Capital Group. "This is only going to make that worse.

As lenders retreat, housing developers have been forced to stall or cancel new projects due to the threat of budget cuts, said Noah Hale, managing director of development at national developer Fairstead.

Michael Dury, chief executive of lender Merchants Capital, said he has seen several affordable-housing deals face delays because of the proposed HUD budget cuts and lenders' "fear of will the money be there?"

The Trump administration has delivered some victories to the housing sector in the new tax law. A provision in the law makes it easier for developers to access the Low-Income Housing Tax Credit, the federal government’s largest program for incentivizing affordable housing.

This LIHTC expansion could spur more than one million new affordable units over the next decade, according to a Novogradac analysis. The law also made permanent Opportunity Zones and the New Markets Tax Credit, programs that aim to promote new development in low-income areas.

"It's a huge, huge win for the industry," said Dury of Merchants Capital.

Still, without voucher programs like Section 8, developers say that newly built housing could be left without necessary operating revenue.

The proposed budget cut "completely contradicts" the victory on LIHTC, said Amy Albery, chief executive of affordable-housing developer Wallick. Nearly all of her firm's 10,000 affordable-housing units use some kind of HUD housing assistance to finance their loans.

A HUD spokeswoman said the administration "will ensure there are proper safeguards to protect the integrity" of the federal government's mortgage-insurance fund.

Write to Rebecca Picciotto at Rebecca.Picciotto@wsj.com

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East Las Vegas golf course transforming into affordable housing development

A city-owned golf course In East Las Vegas, a mixed-use housing development with more than 1,500 units will be transformed, including hundreds of homes for sale at market value and rentals, with a percentage of them reserved for lower-income residents.

The City Council on Wednesday approved the $17.5 million sale of Desert Pines Golf Club and affirmed land-use entitlements for the 95-acre course, clearing a significant hurdle for the project to move forward.

The sprawling community is being developed by McCormack Baron Salazar and the nonprofit Urban Strategies Inc., both operating under Desert Pines Master Development LLC.

We focus on a quality, mixed-income approach," said Vincent Bennett, CEO of McCormack. "Resilient housing is key, but also places where families and children can be resilient.

He said the firm had operated in 24 U.S. states for a half-century.

The vision for the project started to come together in 2022 when "the future of the golf course was in question," Councilwoman Olivia Diaz told the Las Vegas Review-Journal. "And all of our minds came together and we started hammering out this vision."

Diaz, who represents the ward that includes the golf course off Bonanza and Pecos roads, said the land will "provide all kinds of housing opportunities for our community."

"It will also provide workforce training and education opportunities," she added.

The community will house a College of Southern Nevada training center and offer 10 acres for recreation, and space for commercial use, according to city officials. An early education campus has also been proposed.

Councilwoman Shondra Summers-Armstrong said the project gives her hope for her Ward 5, which includes the underdeveloped Historic Westside.

People are afraid of the words affordable housing," she said. "They think it's going to affect them disproportionately.

Uplift the community

A total of 400 homes will be put up for sale and about 1,100 will be offered for rent, according to McCormack Baron and Salazar, which committed to reserve at least half of the rentals for lower-income residents.

Two-thirds of the project will have two- to three-bedroom units, and the remaining will house one-bedroom homes, said Falcon Groupe President Daniel Falcon, who is partnered with McCormack.

The homes being sold at market value will help protect property values in surrounding neighborhoods, he said. "We want to uplift the community, not just what we're building but (also) what's surrounding."

The community will be divided into parcels and built in two phases, said Dina Babsky, the city's director of economic and urban development.

The first phase, expected to break ground in 2027, will include 10 parcels split evenly between homes for sale and affordable rentals, she said. The final phase is expected to begin in 2030 with completion estimated for 2036.

The affordable housing portion of the development is expected to cost $440 million, according to the city.

The developer has secured a $25 million loan from the Nevada State Infrastructure Bank. Clark County and the city of Las Vegas have invested another $22 million from American Rescue Plan Act funds.

Funds generated through home sales will be reinvested into the affordable housing portion, Babsky added.

The federal government pre-approved $5 million for the training center, she said.

Falcon said the partners were "very very happy to be trusted by the city and the councilwoman's leadership to select us."

Diaz said building the community aims to address a growing affordable housing shortage in Southern Nevada.

"Cost of everything has exploded and rents have skyrocketed, so many people feel like they're one paycheck away from being homeless," the councilwoman said. "I feel like the rentals will help people save some resources to then be able to attain that homeownership dream that so many of us have," she added.

Contact Ricardo Torres-Cortez at rtorres@reviewjournal.com .

©2025 Las Vegas Review-Journal. Visit reviewjournal.com. Distributed by Tribune Content Agency, LLC.

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Zohran Mamdani wants to freeze rents for New Yorkers. Here's why it's controversial.

• Zohran Mamdani has pledged to freeze rent for some apartments in New York City if elected mayor.
• This move aims to assist low-income New Yorkers in the face of increasing housing costs.
• But critics argue it may hinder building maintenance and new housing construction.

If one slogan defined Zohran Mamdani's successful campaign to be New York City's Democratic nominee for mayor, it might be his call to freeze the rent.

The pledge — plastered across T-shirts, tote bags, and campaign mailers across the city — has drawn some of the most energetic support and opposition to Mamdani's campaign.

It's not unusual for a New York City mayor to support temporarily pausing rent increases on the city's nearly one million rent-stabilized units, which make up about half of all rental apartments and house more than 2 million people. But Mamdani has gone a step further, promising to replace the members of the Rent Guidelines Board with individuals committed to freezing rents every year of his term.

Tenant advocates say that a rent freeze would provide crucial relief to low-income New Yorkers — especially families of color, seniors, and Gen Z renters — in one of the most expensive cities in the country. But landlords say rent freezes would starve many buildings of crucial income needed to maintain and repair stabilized apartments, while some housing economists say depressing rents could discourage much-needed housing construction .

Here's what's really going on with Mamdani's rent freeze, and what it would mean for the city.

How New York renters are actually doing

Mamdani's rent freeze promise comes at a time when the city's renters are struggling. Approximately a quarter of all city households that do not reside in public housing or utilize a housing voucher are severely burdened by rent, meaning they spend at least half of their income on housing The typical tenant household earns about $70,000 a year, but citywide median rent reached nearly $3,700 per month — or over $44,000 annually — by late 2024.

Rent-stabilized apartments make up the largest portion of the city's affordable housing. According to data from 2023, the median rent for a stabilized apartment was approximately $1,500. the city's latest data — about $141 less than the total median of $1,614 for all rental units.

Black, Latino, and low-income residents are overrepresented as tenants in rent-stabilized apartments and thus could especially benefit from a freeze.

The rising cost of living is making it hard for New Yorkers to stay in the city. "The median income for a rent-stabilized household is $60,000 a year. Any rent hike could push them out of the city," Mamdani said. said in a campaign video .

For now, rents will keep rising. Less than a week after Mamdani's primary win, the nine-member Rent Guidelines Board voted on Monday to raise rents for one-year leases in stabilized units by 3%, and by 4.5% for two-year leases.

The board raised rents by a total of 9% during the first three years of Mayor Eric Adams' term. That's up from Adams' predecessor, Mayor Bill De Blasio, who oversaw three rent freezes during his eight years in office and a 6% increase in stabilized rents overall.

One of the Rent Guidelines Board members who voted in favor of the rent increase, Alex Armlovich, called it "a nuanced compromise" between competing testimonies from landlords and tenants.

The pros and cons of a rent freeze

Critics of rent freezes point to a few major issues. They argue that rent increases are needed to allow landlords to keep up with their costs, including building repairs and maintenance.

Proponents of freezing rents argue that landlords can access other resources to make up for the revenue shortfall. Sam Stein, a housing policy analyst with the Community Service Society — a nonprofit focused on assisting low-income New Yorkers — said that city-run targeted programs designed to help landlords who cannot cover their costs are better suited to address the issue rather than increasing rents for all stabilized units.

Mamdani and other rent freeze advocates argue that many landlords of stabilized units are doing fine. Indeed, a report by the Rent Guidelines Board found that these landlords' average income, after subtracting expenses and, adjusted for inflation, increased by 8% between 2022 and 2023.

But that number doesn't give a full financial picture, as landlords could have mortgages and other debts, and it's an average across a very diverse array of buildings.

Buildings with rent-stabilized apartments range from brand-new, high-end complexes with sky-high market rents and a small number of stabilized units, to 100% rent-stabilized buildings that have had controlled rents for 70 years. That diversity makes it especially tricky to fit a citywide rent increase to all those units.

"We have both the newest, healthiest, most expensive rental buildings in the city and the most distressed, low-rent buildings in the city all under one system, and we're supposed to pick one number," Armlovich said.

Addressing the housing shortage

Fundamentally, New York's affordability problem is caused by a shortage of homes. Recently, apartment vacancy rates hit a more than 50-year low of 1.4%.

Some housing economists worry that freezing rents on stabilized units could discourage housing construction , further depressing the supply of homes and hurting affordability. They point to real estate developers who accept tax incentives on new and converted buildings that include a certain amount of rent-stabilized units. Some argue builders would be less likely to take advantage of these programs if the stabilized units brought in less revenue under a rent freeze.

Armlovich said that several rent freezes under a future administration would likely only have a modest impact on housing construction broadly. But he worries that an environment of frozen rents could scare off some developers and financiers.

"It's just like old conservative, middle-aged bankers being like, 'Oh my god, you want to underwrite a construction loan under socialism?'" Armlovich said.

Mamdani has also proposed other pro-development policies. housing policies The candidate has proposed building 200,000 subsidized affordable homes and doubling the city Housing Authority's funding for preserving existing affordable housing, while he's expressed some interest in loosening land-use regulations to spur new construction.

What renters and landlords think about a rent freeze

While Mamdani's win was something of an upset, lifelong New Yorker John Leyva said it was a reflection of renters' desire to see a mayoral candidate promising to tackle affordability issues head-on. Leyva has been organizing tenants in Brooklyn who he said have been squeezed by rising rents for the past decade.

I was paying $400 a month for a two-bedroom when I first got here," said the 54-year-old, who's lived in his rent-stabilized apartment for the past 30 years. At the time, he was able to afford college, a car, and rent on a minimum-wage job. "Tenants now have two and three jobs just to try to pay what they can now.

Kenny Burgos, CEO of the New York Apartment Association, said that renters' and landlords' interests do not need to be at odds in addressing New York City's affordability crisis, but that a rent freeze is not the solution.

"When it comes to affordability, the only proven way to reduce the rent is to increase the supply," Burgos said. Given the volume of new housing that New York desperately needs, Burgos said Mamdani will have to work with developers and the private sector to meet that demand if he wins this fall.

Property taxes in New York City are the "single largest expense in operating their housing," Burgos said. Without raising rents, landlords are facing a "dire" situation.

But Leyva said it's not as simple as supply and demand. It takes time to build new, permanently subsidized housing, and the private sector isn't sufficiently incentivized to do so, he argued, adding that renters need immediate relief.

Lobby for lower taxes if that's the problem," Leyva said of landlords who feel squeezed by operating costs. "But the tenants can't pay more.

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