Regulation Increases Rent Costs, New Study Finds

WASHINGTON--(BUSINESS WIRE)--A new follow-up study conducted by economists from MetroSight—sponsored by the National Multifamily Housing Council (NMHC) and the National Apartment Association (NAA)—shows that some housing regulations increase the cost of rent, particularly for lower-income renters and those renting from small multifamily properties. This report importantly builds on findings released earlier this year, revealing that overregulation can increase operating costs.

“As housing affordability continues to be a nationwide concern requiring action from state, local and federal lawmakers, this study importantly shows how misguided regulations have the ability to increase monthly costs for renters,” said NAA President and CEO Bob Pinnegar. “Now more than ever, our nation needs responsible, sustainable policy solutions that, instead of raising costs, work to boost the supply of housing and improve affordability long-term.”

“As the nation continues to confront a housing affordability crisis, it’s critical that we understand how sometimes well-intentioned regulations may impact rent levels—particularly for those who can least afford increases,” said NMHC President Sharon Wilson Géno. “This new research finds that certain policies, while at times designed to protect renters, are associated with higher rents, especially for lower-income households. By bringing these data to light, we and our partners at NAA hope to support a more balanced policy conversation—one that supports renters while improving affordability and expanding the supply of rental housing.”

The research specifically analyzed the impact of source-of-income, eviction, resident screening and state preemption laws on rent costs. The study used two distinct and separate datasets, one from CoStar Group – which included market-level data from 391 metros between 2000 and 2024 – and another from the U.S. Census Bureau’s American Community Survey (ACS), which featured 307 metros between 2005 and 2023.

Some of the report’s key findings include:

• Source-of-income regulations increase rents between 5.2% and 5.3%, or about $876 to $1,104 per unit annually.
• Eviction laws increase rents between 5.9% and 6.3%, or about $1,092 to $1,224 per unit annually.
• Resident screening laws increase rents between 1.5% and 3.4%, or about $252 to $708 per unit annually.

“If we want rent regulations to align with affordability, we need to plainly recognize the tensions between them,” said Metrosight Founder and Economist Issi Romem, Ph.D. “It is striking that we found their cost has fallen hardest on lower-income renters and residents of small apartment buildings—the very people they’re meant to support.”

To learn more about the research, access the full report.

For more than 27 years, the National Multifamily Housing Council (NMHC) and the National Apartment Association (NAA) have partnered on behalf of America's apartment industry. Drawing on the knowledge and policy expertise of staff in Washington, D.C., as well as the advocacy power of 141 NAA state and local affiliated associations, NAA and NMHC provide a single voice for developers, owners and operators of multifamily rental housing. One-third of all Americans rent their housing, and 40 million of them live in an apartment home.