Rent Control’s Rocky Waters: NMHC
On the final day of the 2023 conference, housing affordability took center stage.
Affordability is facing the perfect storm, Vice President of Advocacy and Strategic Communications at the National Multifamily Housing Council, Jim Lapides, said at the final day of the 2023 Annual NMHC Conference. Contributing to the affordability issue our nation is currently facing is policy regulation, strong demand and stagnant incomes.
The rent control and housing affordability panel at Thursday’s NMHC session discussed how issues of rent control and housing affordability did not used to be top of mind for the general public and politics. Now, however, these issues are taking center stage. Protests, articles, social media and news media are all gathering to discuss and debate rent control, the eviction crisis and the narrative of corporate landlords.
“There are a lot of challenges, but there are also a lot of opportunities for us to educate about what our industry does,” Lapides said.
The consensus of the panel was that rent control is counterintuitive. “It is a philosophy that, in our opinion, will help a few but will hurt many,” said Alan Pollack, CEO & co-founder of Providence Real Estate. Multifamily developers and owners face fees that are extremely high: insurance fees, land fees, construction fees, etc. With decreasing rent and decreasing revenue, as well as reduced property tax revenues as a result of rent control measures, the market value of controlled rental property also reduces.
Rent regulations can also make future developments and investments more difficult and less likely. However, there are alternative solutions, Patti Shwayder, senior vice president & chief corporate responsibility officer at AIR Communities said.
“We need to increase supply and have local zoning reform,” Shwayder said at the conference. “Property taxes are too high.” She continued to argue that her plea is to help get local officials and coalitions in these areas involved and educated. Working with state and local associations can help orchestrate the right moves towards solving the affordability issue.
“At the end of the day this is really about our residents,” said Pollack. He continued to explain that the industry is highly sensitive to where rents are versus where residents’ incomes fall. The multifamily industry is on the front lines of knowing when rents are not where they should be, he said.