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Affordable Housing Development

Written by Dr. Madeleine Roberts
Published on May 14, 2024
Research Highlights

Half of American renters spend more than 30% of their monthly income on housing.

Residents of metro and rural areas experience similar rates of housing unaffordability in MO.

Federal, state, and local incentive programs are available to increase the supply of affordable housing for low to moderate income people.

The affordable rental housing supply falls short of need nationwide.

Affordable housing is defined by the U.S. Department of Housing and Urban Development (HUD) as a household paying no more than 30% of their monthly income on housing (rent or mortgage) and utilities (HUD). Households paying more than 30% are “housing cost burdened”, and those paying over 50% are “severely cost burdened”. About one third of all American households and half of renters are housing cost burdened (JCHS 2023).

Annual rent cost growth increased rapidly during the COVID-19 pandemic, outpacing inflation, and peaked in 2022 (NMHC 2023a, NMHC 2023b). The costs of buying a home increased more dramatically than rental costs. From 2019-2022 home prices increased by 49%, and 30-year fixed rate mortgage interest rates increased and peaked at 7.08% in 2022.

In 2023-2024 rent growth has slowed significantly and the housing market cooled (JCHS 2024). Housing unaffordability peaked in January 2024 and is beginning to decline (FRED 2024).

Housing unaffordability has been driven by slow growth of housing supply and increased demand (CRS 2023). These factors include:

  • Supply: Restrictive zoning and regulation, high costs of land and development, high interest rates, construction industry disruptions from the Great Recession and COVID-19 pandemic.
  • Demand: Increasing competition for available rental properties and single-family homes.

The unaffordability of housing is particularly challenging for low-income people. No U.S. state has sufficient housing supply that is affordable to its extremely low-income (>30% area median income) population (NLIHC 2024). Housing stock of low-cost rental units is shrinking, while the supply of moderate and high-cost units is increasing (JCHS 2024).

Housing is unaffordable across MO.

MO has fewer cost burdened households compared to the national average (JCHS 2023):

Renters in metro and rural MO counties are similarly cost burdened (Figure 1, U.S. Census 2022, OMB metro county definition). Rural areas face unique challenges in meeting affordable housing need, including (Scally 2018):

  • On average lower incomes and higher rates of poverty than metro areas.
  • Low available housing supply.
  • Lack of historical investment in new housing by developers and federal government.


Figure 1. Percentage of MO renter householders paying over 30% of their gross monthly income on rent, classified as “cost burdened” by HUD. Data from the U.S. Census Bureau, American Community Survey 2022 5-Year Estimate.


Incentives for the development of affordable housing are available.

In MO, the shortage of affordable and available units for extremely low-income households is estimated to be 128,000 units statewide (MHDC 2020).

The MO Housing Development Commission administers funding to developers and nonprofit organizations to build or rehabilitate affordable housing for low and moderate income households. Programs administered by MHDC that provide financial support for new affordable housing projects include:

The USDA offers targeted programs to develop housing in rural communities. Multi-family Housing programs provide property owners with direct loans, loan guarantees, and grants to develop affordable multi-family rental housing in eligible rural areas.

The HUD Community Block Grant program grants to states and localities. For example in St. Louis City, CBGP funding is administered by the Community Development Administration for nonprofit and for-profit developers to construct or renovate housing for low to moderate income renters.

Local programs also support the construction and perseveration of affordable housing units. For example, the St. Louis Affordable Housing Commission provides awards from the City’s Affordable Housing Trust Fund for the development of affordable multi-family, single family, and transitional housing.


For more information on housing cost assistance, see our Science Note Federal Housing Vouchers. See Tax Credits for Developing or Renting Housing for Victims of Domestic Violence, Reentry Programs and Services, and Veteran Homelessness for information on housing need among specific populations.



American Community Survey (2022) B25072: Age of Householder by Gross Rent as a Percentage of Household Income in the Past 12 Months. 2022 5-Year Estimate. U.S. Census Bureau https://data.census.gov/table/ACSDT5Y2022.B25072?q=B25072&g=040XX00US29,29$0500000

Aurand A, Emmanel D, Threet D, Yentel D (2024) The Gap: A Shortage of Affordable Homes. National Low Income Housing Coalition https://nlihc.org/gap

Bruen, C. (2023) Putting Rent Increases in Perspective. National Multi-Family Housing Council. https://www.nmhc.org/research-insight/research-notes/2023/putting-rent-increases-into-perspective/

Center for Housing Studies of Harvard University. 2024 America’s Rental Housing 2024. www.jchs.harvard.edu/americas-rental-housing

Congressional Research Service (2023) U.S. Housing Supply: Recent Trends and Policy Considerations. U.S. Library of Congress.  https://crsreports.congress.gov/product/pdf/R/R47617

Federal Reserve Bank of St. Louis (2024) Housing Affordability Index (Fixed) https://fred.stlouisfed.org/series/FIXHAI

Harvard Joint Center for Housing Studies (2023) State of the Nation’s Housing 2023. https://www.jchs.harvard.edu/sites/default/files/interactive-item/files/Harvard_JCHS_State_Nations_Housing_2023_Appendix_Tables.xlsx

Missouri Housing Development Commission (2020) Five-Year Strategic Plan for Affordable Housing for the State of Missouri. https://mhdc.com/media/0imn1qd4/2020-0910-strategic-plan-no-watermark.pdf

National Multi-Family Housing Council (2023) Quick Facts: Market Conditions. https://www.nmhc.org/research-insight/quick-facts-figures/quick-facts-market-conditions/#pricerent

Scally C, Gilbert B, Hedman C, Gold A, Posey L (2018) Rental Housing for a 21st Century Rural America: A Platform for Production. Urban Institute. https://www.urban.org/sites/default/files/publication/99045/rental_housing_for_a_21st_century_rural_america.pdf

U.S. Department of Housing and Urban Development. HUDUser Glossary. https://archives.huduser.gov/portal/glossary/glossary_all.html



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