For Lance Windel, the problem isn’t hard to describe. “It’s a math problem,” Windel, manager of LW Development, said. Across Oklahoma, apartment complexes sit boarded up. Houses deteriorate. Entire properties fall out of the market. At the same time, renters scramble to find anythin g they can afford. On paper, it looks like a contradiction. Data from the Oklahoma Housing Finance Agency’s Housing Needs Assessment shows the state has more than 220,000 vacant housing units, including nearly 39,000 listed as available for rent. But that number masks a more complicated reality. The issue isn’t how many units exist. It’s whether they can be rented. Windel has spent decades building and rehabilitating housing across Oklahoma. He said the gap between what it costs to build housing and what renters can afford has widened to the point that many projects never get off the ground. Rising insurance premiums, higher interest rates and escalating labor costs can quickly push a project out of reach, especially when rents can’t rise to match. “You can make it work on paper for about five minutes,” Windel said. “Then the numbers start breaking.” Even projects that appear viable often hinge on securing outside financing support, such as tax credits, gap funding or other subsidies that make lenders comfortable. “If you don’t get that allocation, the deal dies,” he said. The Oldest Housing Stock is Disappearing The difficulty is especially acute for older properties. Apartment complexes built in the 1970s and 1980s, long a source of relatively affordable housing, are reaching the end of their useful lives. When developers attempt to renovate them, the scope of the work often expands beyond initial estimates. “You start opening up the walls and finding all the rot,” Windel said. Plumbing systems fail. Electrical systems need replacement. Structural problems emerge. Costs can escalate rapidly once work begins. “To be honest, you would be cost-ahead to doze it and build it back,” Windel said. Even if a developer tears down and rebuilds, the new units will almost certainly command higher rents, pushing them out of reach for the tenants who previously relied on those properties. “The math just doesn’t map a lot of times,” said real estate attorney Michael Laird. State data show Oklahoma faces a shortage of more than 80,000 rental homes affordable to extremely low-income households. That shortage exists even with hundreds of thousands of vacant units. Even if every vacant rental unit were available — an unrealistic scenario — the state would still fall tens of thousands of units short. Housing analysts said the shortage is concentrated almost entirely among the lowest-income renters. “We’re not building enough housing, and we have aging housing that is dropping off the market,” said Sabine Brown, a housing policy analyst with the Oklahoma Policy Institute. At the same time, the state is losing what developers call “naturally occurring affordable housing” — older units that once served as lower-cost options without public subsidy. As those units deteriorate or are redeveloped, they are often replaced with higher-rent housing. That creates a structural imbalance: fewer affordable units at the bottom of the market, even as total housing supply grows. Brown said that imbalance reflects a fundamental limitation of the housing market itself. Private development, she said, tends to produce housing at price points where projects can generate a return, not necessarily where the need is greatest. “The market is very good at producing housing for people who can afford it,” Brown said. “It’s much less effective at producing housing for people who can’t.” As a result, shortages at the lower end of the market can persist even during periods of overall housing growth. New construction adds supply, but often at rents or prices that are out of reach for the lowest-income households. Vacant Units, But Not Available Ones In Oklahoma City, the disconnect is visible in plain sight. “I think we have a lot of vacant apartment complexes and units in Oklahoma City,” said Shannon Entz, the city’s housing and community development director. “If you just drive over Broadway Extension and go over to the northeast side, or you can drive down south of the river, you’ll see a boarded-up or vacant house in almost every block.” But those units are not simply waiting to be occupied. Many are effectively trapped. Some are tied up in probate or unclear ownership, leaving no one with the authority — or financial ability — to repair or sell them. Others have suffered years of deferred maintenance. “If you don’t get something as simple as a roof leak fixed, that can snowball into all kinds of problems,” Entz said. Water intrusion can lead to mold, structural damage and electrical issues. Repairs that might have been manageable early on can grow into full-scale rehabilitation projects costing tens of thousands of dollars. Cynthia Campbell, with the Oklahoma Coalition for Affordable Housing, said many vacant properties are technically valuable, located near schools, jobs and retail, but functionally unusable. “They’re pest-infested, fire-damaged or structurally compromised,” she said. Rehabilitation, in many cases, costs as much as building new housing. Sometimes more. That, she says, helps explain why more units aren’t brought back to the market. “There has to be a barrier,” Campbell said. “Or why wouldn’t they?” In smaller communities, the problem takes a different form. In Guthrie, planning director Dan Kassik said many available homes simply don’t match what residents need. “We need that diversity of housing options,” he said. The market is saturated with larger homes, while smaller units — duplexes, starter homes, modest rentals — are scarce and quickly absorbed. “It isn’t even an affordability issue at some point,” Kassik said. “It’s just we don’t need a big house.” Financing Affordable Housing is a High-Stakes Puzzle At the center of the housing shortage is what officials call the funding gap, the difference between what it costs to build or rehabilitate housing and what tenants can afford to pay. That gap has widened in recent years. Construction costs have increased. Insurance premiums have surged. Borrowing has become more expensive. “I don’t think the market here in most cases can support it without some kind of assistance.”Cathy O’Connor But wages, particularly for lower-income workers, have not kept pace. “I don’t think the market here in most cases can support it without some kind of assistance,” said Cathy O’Connor, founder of COalign Group. To bridge that gap, developers rely on a patchwork of public and private financing tools. The most important of those is the Low-Income Housing Tax Credit, a federal program that provides tax incentives to developers who build or rehabilitate affordable housing. But the program is limited and highly competitive. “There’s approximately 40 applicants that get funded using the LIHTC and they’re going to fund 10 to 12; that’s how much money they have to give,” Windel said. Projects that don’t receive funding are often shelved indefinitely. Even when developers secure tax credits, deals often require multiple layers of financing — including bank loans, local incentives and sometimes additional federal or state support. Each layer adds complexity, risk, and the potential for deals to fall apart. Affordable housing financing is often described as a capital stack, layers of funding assembled to make a project viable. A typical development might combine tax credits, bank financing, local incentives and developer equity. Each piece carries its own requirements, timelines and risks. If any one piece falls through, the entire project can collapse. Brown said that complexity reflects a deeper issue: the economics of affordable housing often don’t work without intervention. Rents that are affordable to lower-income households typically do not generate enough revenue to cover development and operating costs — particularly in a high-cost environment. That gap must be filled through subsidies, tax credits or other forms of public support. Without those tools, she said, the private market alone is unlikely to produce housing at the scale needed to meet demand. “You’re trying to line up five or six different things at once,” Windel said. “If one of them doesn’t show up, the whole thing falls apart.” For renters, those financial dynamics translate into constant instability. “That threat of homelessness is constant,” said Tyler Parette, executive director of Housing Forward. Housing shortages don’t remain confined to a single income group. Crew members work on Lance Windel’s housing project at 19000 N Western Ave. in Oklahoma City. (Brent Fuchs/Oklahoma Watch) When higher-income households can’t find housing, they move down the price ladder — competing for units that would otherwise be available to lower-income renters. “When you don’t have enough units throughout all income brackets in the market, it’s usually the lower end of the market that gets pushed the hardest,” said O’Connor. That pressure shows up in household budgets. About one-third of Oklahoma renters are cost-burdened, spending more than 30 percent of their income on housing. Approximately one in six spends more than half. In tight markets, tenants also have fewer options and less leverage. “In a tight housing market, the landlord can often just move somebody else in,” said Legal Aid attorney Greg Beben. That dynamic can leave tenants with limited recourse even when housing conditions are poor. Meanwhile, some landlords continue renting deteriorating properties because demand remains high. “People are desperate to find housing,” Beben said. Darrell Beavers, housing development programs director with the Oklahoma Housing Finance Authority, said the problem is often misunderstood as a simple shortage of units. In reality, he said, it is the result of multiple systems interacting at once. Financing structures, regulatory requirements, construction costs and wage levels all shape what housing gets built — and who can afford it. “It’s a multipronged problem,” Beavers said. Beavers said housing policy often focuses on individual pieces of the problem — zoning, construction or subsidies — without fully accounting for how those pieces interact. Efforts to increase supply, for example, may succeed in producing new units, but not necessarily at price points accessible to lower-income renters. At the same time, policies aimed at affordability can struggle to keep pace with rising development costs. The result is a system where each solution addresses part of the problem, but no single approach resolves it entirely. No Single Solution in Sight Efforts to address the issue often focus on increasing supply. But without addressing the underlying economics, new construction alone may not resolve the shortage — particularly for lower-income households. “The number one thing people misunderstand is that it can just be solved with more construction,” Entz said. She pointed to wages, construction costs, financing systems and regulatory barriers as key drivers. “It’s not a lack of people having kind hearts,” Entz said. “It’s a matter of the financial system.” In Oklahoma City, officials say much of the recent development has focused on larger homes, while demand is increasingly coming from smaller households. “We have been building mostly three- and four-bedroom units,” Entz said. But many renters, including young professionals and older residents looking to downsize, are searching for smaller, more affordable options. That mismatch limits how much new construction actually solves the problem. The same dynamic is visible in Tulsa. Gene Bulmash, senior advisor for housing in Tulsa, said the challenge is not just identifying where housing is needed, but making projects financially viable. Like Oklahoma City, Tulsa is focusing on infill development and redevelopment of underused properties. But those projects often face the same barriers developers encounter statewide — rising construction costs, financing hurdles and limited subsidy resources. “The costs of building and maintaining housing have increased faster than incomes,” he said. “We’re trying to use all of our resources to increase housing maintenance and development in order to increase affordability.” Turning a site into housing that is both affordable and financially sustainable remains difficult. The result is a planning environment where cities can map out housing needs with increasing precision — but still struggle to deliver projects at the scale required. In Oklahoma City, the need is even larger — nearly 45,000 units to be built, preserved or rehabilitated. Statewide, lawmakers warn the gap could approach 100,000 units within the next five years. The consequences extend beyond housing. Rural communities struggle to recruit workers when housing is unavailable. “Our rural communities are telling us they can’t attract businesses because they don’t have enough housing nearby,” said state Sen. Julia Kirt. Local governments are beginning to respond with long-term housing strategies — but those plans reflect the same structural challenges facing the private market. Oklahoma City’s housing affordability strategy focuses on increasing supply, preserving existing units and expanding homeownership opportunities. The plan includes incentives for developers, funding for rehabilitation programs and efforts to streamline permitting and reduce development barriers. But even with those tools, officials acknowledge the limits. Much of the plan depends on leveraging outside funding and private development — both of which are constrained by the same financial pressures that limit new construction. Tulsa has taken a similar approach, with a housing study estimating the city will need about 12,900 additional units over the next decade. The strategy emphasizes infill development, redevelopment of underused properties and expanding housing options across income levels. In both cities, the challenge isn’t identifying the need. It’s closing the gap between policy goals and project feasibility. Brown said the challenge is not simply increasing supply, but aligning that supply with the needs of the lowest-income residents. Policies that encourage development can help expand housing overall, she said, but without targeted strategies, they may do little to address affordability gaps. “You can build more housing and still have a shortage of affordable housing,” Brown said. “Those are two different problems.” Lawmakers and local officials in other communities are exploring a range of solutions. Proposals include tax credits for converting abandoned buildings, zoning changes to allow more housing types and infrastructure investments to support development. Cities are experimenting with incentives, faster permitting and partnerships with developers. At the federal level, policymakers are considering broader reforms aimed at increasing housing supply. But nearly everyone involved agrees on one point: There is no single solution. Oklahoma’s housing shortage isn’t just about how many homes exist. It’s about whether those homes can be built, repaired and rented at a price people can afford. Units sit empty because they are too expensive to fix. Renters struggle because incomes haven’t kept pace. And until those numbers align, the paradox will remain: Empty buildings in a full market. Stephen Martin is an Oklahoma City-based journalist and contributor to Oklahoma Watch. Contact him at [email protected]. The post Oklahoma’s Housing Paradox: Vacant Units Everywhere, Affordable Ones Nowhere appeared first on Oklahoma Watch. ...read more read less