This study analyzes transformations in institutions of affordable housing production connected to neoliberalization, which have impacted affordability rates and income gaps in Copenhagen and Istanbul. Also, different types of affordable housing began to develop, such as modular housing of Almenbolig+ in Copenhagen and housing for very low-income people in Istanbul. Increased affordability rates are the result of the transformations of welfare state-based practices to market-based approaches. The aim of this paper is to analyze and compare how affordable housing institutions have transformed from being fnanced through public funds to private funding sources since the periods of the financial crisis in 2001 and 2008 in a Western and non-Western country. Using the concept of neoliberal localization, this comparative case study employs a variation funding tool to analyze the transformations under three causal mechanisms. The first mechanism is the state withdrawal of providing finance to affordable housing production; the second is a collaboration with the private sector for financing affordable housing while increasing the authority of municipalities. The third mechanism is restructuring institutions to open a base for public-private partnerships. Primary data was provided from interviews, while secondary data was gathered from planning policies, legislations, OECD, and country statistics. The outcome of this study reveals information about changes in affordable housing institutions and neoliberal effects on affordable housing production due to contributions of local governments contingent on requirements of private funding.