How local rules and regulations are increasing expenses and negatively impacting housing affordability.
Local regulations aimed at protecting tenants have had significant financial implications for multifamily housing providers. This study—sponsored by NMHC and the National Apartment Association (NAA) and authored by Daniel Shoag, Ph.D. and Issi Romem, Ph.D. of MetroSight—examines how some overly stringent operational regulations impact costs, revenues and, ultimately, housing supply. While these regulations are intended to enhance housing stability, in actuality they often increase costs for property owners and can lead to higher rents and reduced investment in new housing.
Key Findings
- Source-of-income laws, which aim to prevent discrimination based on income sources like housing vouchers, led to higher revenue losses and increased operational costs for housing providers following these regulations.
- Eviction regulations, including just-cause eviction laws and right-to-counsel statutes, increased legal fees, extended eviction timelines and raised costs for marketing, utilities and salaries for multifamily housing providers.
- Resident screening laws, which prohibit considering past arrests, convictions or juvenile records, resulted in greater revenue losses and higher operational expenses for utilities, repairs and maintenance.
- State preemption laws, which standardize regulations at the state level, helped properties in those areas report higher revenues, reduced operational losses and increased capital expenditures, indicating that regulatory stability supports multifamily viability and reinvestment.
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Staff Resource
Study Authors
- Daniel Shoag, Ph.D.
- Issi Romem, Ph.D.