The lack of Commonwealth government funds for public housing has encouraged state governments across Australia to develop ‘Affordable Housing Strategies’ to address the problems that result from the shortage of housing available for low-income households. However, to date there has been limited discussion of the implications of these affordable housing strategies and their significance as a form of policy intervention. This article highlights the Tasmanian Government's ‘Affordable Housing Strategy’ as a case study to illustrate the obstacles that confront state housing policy makers. These include difficulties in securing partnerships with the private sector, an inability to influence macro-economic policy settings, fluctuations in the property market cycle and a reliance on small and uncertain budgetary allocations. However, there is limited scope to address some of the problems that have undermined previous state and Territory housing policy initiatives by reaching agreements with local government to ea...