Owners of affordable housing properties are facing rising operational costs, but higher income is helping offset some of those pressures. According to a new report from Yardi Matrix, expenses for affordable multifamily units grew by an average of 6.4% year-over-year through September 2024, a sharp rise from the typical 3-4% annual increase in prior years. While this marks a slight deceleration from the previous two years, it reflects an ongoing trend of rising operational costs, with insurance and marketing expenses driving the increases.

Insurance costs have been a significant burden, surging by 20.3% year-over-year in 2024. This increase is largely due to the rise in weather-related claims—hurricanes, floods, and wildfires—that have become more frequent and severe. Insurance now accounts for nearly 10% of total expenses for affordable housing properties, up from 5.6% in 2018. Regions like the Southeast, Southwest, and West have seen some of the highest premium increases, with cities like Houston, Tampa, and Los Angeles experiencing jumps of more than 25%.