Housing Nonprofits Face Challenges That Could Threaten Their Ability to Meet Increasing Demand

Rent and housing costs are rising far faster than earnings. Long-term supply challenges and this growing mismatch between earnings and housing costs have made housing increasingly unavailable and unaffordable, especially for Americans with lower incomes. Research shows that housing unaffordability contributes to housing insecurity and homelessness, particularly among children and young people. At the same time, anticipated cuts to the social safety net are likely to worsen housing insecurity, especially for vulnerable people, such as older adults.

As these pressures intensify, housing-focused nonprofit organizations—which build and manage affordable housing, operate shelters, provide housing support services, and advocate for policies that expand housing access—are ever more critical in US communities. Yet findings from the 2025 National Survey of Nonprofit Trends and Impacts suggest these organizations are facing challenges that affect their ability to meet local needs. What challenges do housing nonprofits face, and how might these challenges affect housing stability across the country?

The critical roles housing nonprofits play

Nonprofits are critical to the housing ecosystem because they expand housing access and stability. Nonprofits such as community housing development organizations, affordable housing developers, housing navigators, and legal advocates often help fill gaps in the housing ecosystem, especially for people with fewer resources or unique needs.

Accessing and remaining in stable housing is often challenging and complicated. Finding affordable units can be difficult, as many are unlisted on popular rental search sites and may require multiple in-person application submissions. People with specific needs—such as a unit with more than two bedrooms or mobility support—face significant scarcity in the market. Households facing eviction or housing instability often need help accessing the legal or financial resources they need to avoid homelessness. First-generation homebuyers may need guidance as they prepare to purchase a home, including credit counseling and down payment assistance. Housing nonprofits help fill these gaps.

Given the worsening housing crisis, these organizations are increasingly critical in helping people access and remain in stable housing. Without them, cities and states face high risks of increased eviction, homelessness, and other housing-related costs. Yet these organizations may be uniquely at risk in the current environment.

To explore this, our team focused on housing-focused organizations that responded to the 2025 National Survey of Nonprofit Trends and Impacts. We included organizations with National Taxonomy of Exempt Entity codes in the “L – Housing and Shelter” category and those with a housing-focused mission on their Form 990s. We compared these nonprofits with other nonprofits in our sample. We found housing nonprofits were less likely to report being able to meet demand for their services in 2024; more likely to experience delays, pauses, or freezes in government funding in early 2025 (between January 1 and their survey completion dates, from April 16 to June 27, 2025); and more likely to anticipate increased demand in the 12 months following the survey.

Difficulty meeting demand

In 2024, 59 percent of housing nonprofits reported being unable to meet demand for their services, compared with 38 percent of nonprofits overall. In other words, nearly two in three housing nonprofits lacked the capacity to meet their communities’ needs.

Delays, pauses, and freezes in government funding

In early 2025, housing nonprofits were more likely than nonprofits overall to report experiencing a delay, pause, or freeze in government funding. Thirty-five percent of housing nonprofits reported experiencing these disruptions, compared with 27 percent of nonprofits overall (figure 2). This disparity may reflect freezes and delays affecting federal housing supports—particularly the Housing Choice Voucher Program—as well as uncertainty surrounding fiscal year 2025 budget proposals that would have constrained federal housing funding.

Research shows that delayed government payments can have serious consequences for nonprofits, forcing them to reduce staff, draw on reserves, increase lines of credit, reduce programs, and close program offices or sites. The 35 percent of housing nonprofits reporting experiencing government funding disruptions may therefore face heightened financial and operational strain.

Anticipated increases in demand

Looking ahead, housing nonprofits are more likely than nonprofits overall to expect demand for their services to increase. Eighty percent of housing nonprofits anticipate this, compared with 68 percent of nonprofits overall (figure 3). For organizations already unable to meet current demand, this projected increase could lead to even more people being turned away from affordable housing, shelter, and other essential supports.

What this means for housing stability

Taken together, these findings point to a concerning pattern. Housing nonprofits entered 2025 already struggling to meet demand and then faced disproportionate disruptions in government funding that further constrained their capacity. Demand for their services is expected to grow as housing instability and homelessness both increase. If additional challenges emerge, such as proposed time limits to housing vouchers or cuts to homelessness support systems, many services may become unavailable. Without greater funding stability and investments, housing organizations may be forced to serve fewer people, all as housing insecurity deepens.

The consequences extend beyond individual nonprofits. When housing nonprofits are unable to operate at full capacity, more families experience homelessness, housing instability, and prolonged hardship. This unmet demand also places additional strains on other nonprofit service providers and government social services. Addressing these challenges will be critical not only for sustaining housing nonprofits but also for preventing worsening housing crises in already strained communities.