Housing's affordability, attainability, and access crisis in the U.S. is full of brain-breakers.

For instance:

Has a century-high monument to sweeping American renter protections — many of them designed to battle greed, corruption and their byproduct inhumane living conditions common among rental properties of the past — become one of the cudgels to obliterate 21st-century solutions to fairer, healthier, and more attainable access to shelter for more Americans?

Questions like this one often involve common sense, real-world evidence, and the Golden Rule in a three-way rivalry. Amid such questions, apartment owners and developers often share a complaint with homebuilders: State and local laws make building ground-up affordable housing not just inhospitable to strategic business and investment modeling but practically impossible.

Rules and regulations whose intent was, is, and will be is to protect the rights of people to access and live in decent, healthy, and safe homes today stand squarely in the path of people and firms that want to develop, produce, and manage more of just that.

Homebuilders have routinely said they could build more starter homes if zoning laws, impact fees, and other regulations weren’t hindrances. Rising land prices would perhaps have less impact if regulations were more flexible.

It’s a similar situation with apartment developers. Two economists commissioned by the country’s largest multifamily associations unveiled a new study last month showing how state and local laws reduce apartment revenue, drive up costs, inhibit new development and construction, and drive rent prices ever higher.

Their findings suggest that laws intended to protect tenants may inadvertently – but mightily – play an active role in the affordability crisis.

The study comes as the Trump administration promises to cut regulations at the federal level, ushering in a new era of free market-driven policy and business. On his first day, he signed an executive order directing the Department of Housing and Urban Development to “lower the cost of housing and expand housing supply.”

NAA and NHMC backed the president's promise, sending a letter to the administration on March 3 based on the study. The letter asks for a review of 32 federal programs, rules, and regulations at 10 different agencies to improve housing affordability.

However, actions to cut staffing at HUD and its Federal Housing Administration, in addition to cutting programs, have raised doubts about whether lowering the cost of housing and expanding supply would be plausible given the profound upheaval of current and future resources.

Last week, HUD Secretary Scott Turner nixed the Affirmatively Furthering Fair Housing rule created under the auspices of the 1968 Fair Housing Law to stop housing discrimination. Former President Obama expanded on the rule, requiring cities to document how cities seeking HUD money were taking steps to ensure no discrimination. Trump eliminated the rule in his first term. President Biden restored it when he assumed office in 2021.

Turner characterized the move as cutting costly red tape and returning decision-making to local governments.

“Local and state governments understand the needs of their communities much better than bureaucrats in Washington D.C.,” Turner said in a statement. “Terminating this rule restores trust in local communities and property owners, while protecting America’s suburbs and neighborhood integrity.”

For the NHMC study entitled "Behind the High Cost of Rent,” Issi Romem, founder of real estate data research firm MetroSight, and Daniel Shoag, an economist with the firm, analyzed data collected from more than 2,100 in 50 U.S. markets. Properties had 50 or more units for a combined total between 600,000 and 850,000 units in the study.

Their analysis ended in 2019. This way, they said, the COVID-19 years—when rents skyrocketed—would not distort the results.  

They focused on regulations enacted between 2004 and 2019, focusing on four key areas: source-of-income laws, eviction regulations, resident screening laws, and state preemption laws.

The first three had negative impacts while state preemption laws were positive.

Source-of-income Laws

Landlords cannot refuse renters based on income from housing vouchers, child support, disability benefits, or Social Security under these laws. According to the report, "Properties operating under these laws reported greater revenue losses and higher operational costs."

More local governments are adopting ordinances to supplement state source-of-income laws, further increasing compliance requirements. Fair housing advocates continue to lobby for stronger enforcement measures, including mandatory training and fines for non-compliance, which increase property operators' costs.

The report said local ordinances are expanding state source-of-income laws, and fair housing advocates are pushing for stricter enforcement, including mandatory training and fines. Both of these increase property operators' costs.

Eviction Regulations

Eviction regulations, while designed to protect tenants from unfair evictions, can have unintended consequences. The report noted that these regulations "increased legal fees, extended eviction timelines, and led to higher marketing, utility, and salary expenses for multifamily owners and operators."

Just-cause eviction laws grew more prevalent as rental prices increased. The reasons:

• Nonpayment of rent
• Lease violations that remain uncorrected after notice is given by the owner
• Engagement in criminal activity on the property
• Nuisance behavior or substantial damage to the property
• Interference with the safety or enjoyment of the owner or other residents
• An owner’s plan to demolish or substantially rehabilitate the unit, or remove it from the rental market.

Housing advocates have claimed that landlords abuse the demolish or rehabilitate clause. Battles tend to center on cities with rent control. Landlords have been accused of using the remodel clause to remove tenants and raise rents above the allowable level. Last year, Los Angeles removed the “substantial remodel” clause from its just-cause ordinance.

Some cities have passed “right-to-counsel” laws that guarantee legal representation for evicted tenants. The report said these laws can slow down evictions and increase landlord costs.

Resident Screening Laws

The report notes that "properties operating under these laws experienced greater revenue losses and greater operational expenses in utilities and repair and maintenance." This suggests that these laws can make it more difficult for landlords to select reliable tenants, potentially leading to increased costs.

"Resident screening laws could increase capital expenditures by incentivizing multifamily owners to invest in property upgrades as a strategic measure to justify rent increases," the report said. "Upgraded units can command higher rents and thus mitigate higher compliance costs associated with resident screening laws. These upgrades, however, could further reduce the stock of affordable housing in affected jurisdictions."

Preemption Laws

In contrast, state preemption laws, which limit the ability of local governments to enact certain regulations, had a positive effect on the industry. Typically, they prohibit cities and counties from passing rent control, eviction protections or any other local law that doesn’t meet state standards.

According to the report,

By setting regulatory floors or ceilings, preemption laws reduced the administrative complexity of localized ordinances, leading to improved revenue, reduced operational losses, and increased capital expenditures for multifamily units.”

The economists conclude that a stable regulatory environment supports multifamily viability and encourages reinvestment. 

"Policymakers face the challenge of balancing resident safeguards against the operational realities of multifamily housing providers to ensure a stable, adequate, and affordable supply of rental housing," the report said.