Proptech in Affordable Housing: Finding Efficiencies Amid the Red Tape

From municipalities to the federal government, affordable housing is a highly regulated and subsidized real estate sector. The result is an often frustratingly complicated system for developers, owners, property managers and residents. 

Like the U.S. housing sector in general, affordable housing suffers from a lack of supply. While proptech has little to offer to improve supply, it does offer a variety of other innovations to place residents in existing affordable housing more efficiently and to operate that same housing more transparently.

A significant issue in the sector is tenant applicant certification and recertification.

“The traditional process is very manual, and that’s still the way it is done by the vast majority of property teams today,” said Christine Wendell, co-founder and CEO at Pronto Housing, a Manhattan-based affordable housing compliance software startup for owners and renters. “So, when someone applies to affordable housing and for their annual recertification without Pronto, they go in person, fill out forms manually, and the property team needs to know the specific regulatory requirements of that building. Overall, it takes a ton of time, costs way too much, and is a pretty terrible resident experience.

Wendell’s  background is in multifamily asset management, where she oversaw lease-ups that had an affordable housing component, so she has insights into the often frustratingly long process. Such experience led her to start Pronto in 2020 to make the process of qualifying residents for affordable housing faster and easier.

Her firm provides two key services. “We provide software for property teams — kind of like TurboTax for income certification,” Wendell said. “And residents can apply to housing on their own in their own time — with Google Translate built in, text pictures of documents — making it really easy for them.”

The major subsidies for affordable housing come from the U.S. Department of Housing and Urban Development (HUD), including federally subsidized Low-Income Housing Tax Credits (LIHTC). But subsidies also come from state and local programs that put in place zoning restrictions, tax-exempt bonds, real estate tax exemptions, density bonuses, and various programs that incentivize or require local developers to have an affordable component.

Allen Feliz, vice president of solutions and innovations for affordable housing at MRI Software, said that his firm can optimize current resources that incorporate these various subsidies and requirements (even if, like other proptech firms, it can’t do much about the supply).

“We work with local housing authorities, state housing finance agencies, affordable housing owners and operators, and property managers,” said Feliz. “We also work with funders, lenders and investors of affordable housing, who primarily invest through the LIHTC program. So a variety of stakeholders in the affordable ecosystem.”

MRI’s software helps manage housing authority programs such as the issuance of federal Section 8 vouchers. It also aids owner-operators with affordable housing compliance management technology that helps ensure they’re meeting all the requirements with their regulators, including when it comes to resident income, and that the owners are charging the correct rents, among a host of other requirements, said Feliz.

Many in the affordable housing field feel frustrated because of the enormity of the challenge and obstacles to success, Feliz said, but he sees some reason for a more positive public sector environment in the near future.

“I would like a world where there are more resources, but I wouldn’t say that all hope is lost right now for proptech because of what we’re going through,” he said in late June. “One important thing to point out, though, is that not every single program is on the chopping block right now. One program that is making a lot of progress and will potentially see more resources is the LIHTC program. Congress is working on a reconciliation bill right now that passed the House. The Senate is working on its version right now, and in both LIHTC will be expanded. This is something that the industry has been working on for a number of years, and it looks very close to basically an expansion, which will allow for more resources and more affordable housing.”

Proptech startup LiCheck began in 2023 to tackle the geographic and bureaucratic challenges of the LIHTC application itself, said Erik Smith, the firm’s CEO and co-founder.

“LiCheck attacks the doubly bureaucratic application process, meaning that there are regulations and requirements from a state level, but also from a federal level,” said Smith, whose company was founded in Nashville, Tenn., but is now headquartered in Richmond, Va., where he makes his home. “Those qualifications in the application act as a barrier to entry for potential developers that have the capabilities to develop low-income housing. And that barrier prevents them from accessing the LIHTC awards and applications, and therefore the equity needed to fund those deals.”

LiCheck provides a software interface to ensure compliance with state Qualified Allocation Plans (QAPs) — essentially the blueprints for how states will distribute LIHTCs — and federal regulations. The company is currently in its alpha phase, focusing on markets in Maryland, where Smith began his development career prior to starting his proptech company, he said.

Currently LiCheck relies on people to deal with QAPs for developers who can’t keep up with out-of-state regulations. But it plans to use artificial intelligence to scrub QAPs and to analyze deals that have been submitted through the LiCheck platform to provide those in real time, Smith added.

Rabbet, a Denver-based software as a service company founded in 2014 that supports real estate developers, capital partners, and lenders, has developed a product specifically for HUD loans. It works closely with real estate lenders and developers in the affordable housing space, said CEO and founder Will Mitchell.

“We actually have over 50 percent of HUD lending in the industry on our platform,” said Mitchell. “We help manage a lot of the complex requirements throughout the capital stack, whether it’s tax credits or different types of restrictions around funding source usage that can be relatively difficult to track on an affordable housing project. That’s brought together in a standardized, streamlined solution that allows for everyone to have real-time access to up-to-date data.”

Mitchell noted a growing interest in affordable housing and the importance of zoning flexibility and capital sources.

“If anything, affordable has been picking up,” he said. “Talking to HUD lenders that we work with, they’ve been optimistic that some of the changes might be accretive to the affordable housing investment space. I can’t speak to that with further expertise, but as far as investments in technology, we have seen it be stronger recently in the affordable space than the market in general. That’s because there’s a little less uncertainty on that side than there has been on some of the just pure market aspects. But uncertainty in the market, notably infrastructure costs in relation to tariffs, is hard for anyone to manage, whether it’s affordable or market-rate developments.”

A couple of other factors also affect the attraction to affordable housing, said Mitchell.

“When I think about affordable, the two things that really support affordable housing in this country are zoning flexibility that allows for the developer to put more units in a lot than they could if it wasn’t going to serve these affordable housing requirements,” he said. “The second is access to various capital sources that are available to people who are targeting solving this problem, typically tax credits, HUD lending, or other sorts of capital.

“It’s far more complicated to manage and administer in order to get the project done than a typical market-rate construction loan. So as you think about these complex capital stacks that often are involved in managing an affordable housing project, that’s where our software can step in and help remove some of that administrative burden that a typical market developer would not incur as a part of doing a development.”

Although federal financing plays a huge role in affordable housing and the way in which proptech interacts with the sector, local factors matter a lot too, said Amar Amte, founder and CEO at Pegbo, a San Francisco Bay Area-based affordable housing software platform that connects local subcontractors with general contractors and owners to meet municipal compliance requirements.

“All these affordable housing projects are funded by taxpayer money, bond money, and that comes with a lot of spending requirements and mandates,” said Amte. “You have to hire certain local businesses, and what we are doing is helping with the compliance of that.”

Pegbo verifies and vets subcontractors, along with tracking spending on affordable housing projects in states that include Arizona, California and Texas, he said.

“These all have requirements to hire local businesses,” Amte said. “We help in finding them by having built a LinkedIn-style subcontractor database. We are like a clearinghouse for the whole compliance element.”

Pegbo uses AI to automate reporting and help subcontractors find projects efficiently, experiencing growth since its founding in 2023.

“Affordable housing is our forte, and we’re noticing across projects that the minority business enterprise (MBE), or race- or gender-based allocation like LGBTQ — those things are going away,” Amte said of local agencies’ focus on which subcontractors get affordable housing work. “But what cities and counties are doing is seeing that there’s a significant overlap between an MBE and a local business enterprise. So what the cities and counties have done [is] come up with these different programs to support local businesses. So, while race and gender are going away, local participation is very strong.”

New York City, perhaps the most notoriously byzantine local affordable housing market, is being addressed by Axcces, a Brooklyn-based startup that automates the affordable housing process. Axcces uses AI to determine eligibility and a unified application system to simplify the leasing process for developers, property managers, applicants and public agencies.

“We estimate it takes 80 hours to lease a unit for property managers on the affordable side,” said Emily Levin, co-founder and CEO of Axcces. “They are losing about $1.5 billion a year in vacancies, as it can take anywhere from one to two months to a year and a half to get housed. So everybody is struggling.”

Along with her co-founder, Satya Maganti, who helped build Housing Connect, the online housing lottery platform for the New York City Department of Housing Preservation and Development, Levin brought her experience as a social worker dealing with homeless people to the February 2025 creation of Axcces.

“A lot of the legacy products that exist in the market today weren’t really built for affordable housing and they can’t handle the layers of complexity that are involved, so we built this product that covers three areas of affordable housing,” said Levin. “We use AI to automate the lease-up process, so that all the documents that get uploaded into the system are read through our proprietary AI algorithm. We extract that in terms of what property managers are having to do in a manualized process. So we’ve cut that process down from 80 hours to five minutes.”

Axcces also automates the recertification and waitlist management processes, Levin said, adding that the startup, which charges property managers per unit per month, plans to launch a public hub similar to Zillow for affordable housing. The company has received $90,000 in funding from the Robin Hood Foundation and is currently bootstrapping as well.

Axcces is off to a good start with a “major New York City” affordable housing owner with 30,000 units as its first big client, said Levin, who declined to name the company. However, Levin worries about technology being able to positively impact the sector.

“I would say that proptech in general is really behind in the affordable area,” she said. “It’s left that whole industry kind of just to flail. No one seems to really care about affordable.”

Philip Russo can be reached at prusso@commercialobserver.com.