T he cost to build has risen sharply across the board, but nowhere is the impact felt more acutely than in the affordable housing sector. Developers, nonprofit organizations, and policymakers have long struggled to meet the demand for housing that working families can afford. In today’s economic environment, the challenge is even steeper. Every component of the building process—materials, labor, land, and regulatory compliance—has grown more expensive, pushing affordable housing projects to the edge of financial feasibility. Over the past several years, the cost of construction has climbed steadily, with inflationary pressures and supply chain disruptions compounding the problem. Engineering News-Record reports that in 2024 alone, steel prices rose by 11.2 percent across major U.S. cities, while the broader materials cost index increased about 3 percent year over year. MATERIALS Lumber, emblematic of pandemic-era shortages, remains more expensive today than it was before 2020, even after its historic spikes cooled. Other building materials, such as copper and steel-mill products, have seen double-digit price increases, rising by more than 13 percent in 2025. Each percentage point of increase may appear modest on paper, but magnified across thousands of units, the result is millions of dollars in added expenses. SKILLED LABOR The labor market has only added to the difficulty. Construction firms nationwide are struggling to find skilled labor as older tradespeople retire, and interest in
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