Report: Rising MF Rent Control Leads to Falling Development, Investment

A growing number of municipalities and jurisdictions implementing apartment rent-control measures are losing interest from multifamily investors and developers, according to the National Multifamily Housing Council’s Quarterly Survey of Apartment Market Conditions.

The survey, conducted in October 2019, showed 58% of respondents operating in jurisdictions that either recently imposed, or are planning to, implement rent control. Of the respondents in these markets, 34% cut back on their investments or developments, with an additional 49% considering doing so.

The survey found that national market conditions remain strong as the Market Tightness (54), Equity Financing (55), and Debt Financing (75) indexes all came in above the breakeven level (50). The Sales Volume Index (46) indicated a continued softness in property sales.

“While there has been much speculation recently about a coming recession, these latest survey figures suggest that apartment demand continues to drive rent growth and occupancy,” noted NMHC Chief Economist Mark Obrinsky.

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