Behind the High Cost of Rent: How Overregulation Is Making Housing Less Affordable

The Real Drivers of Rising Rent

Rent is rising across the country—and while inflation, interest rates, and housing shortages are all part of the puzzle, new research points to another powerful factor: overregulation.

A new report titled "Behind the High Cost of Rent", commissioned by the National Apartment Association (NAA) and the National Multifamily Housing Council (NMHC), reveals how well-intentioned rental housing regulations are unintentionally driving up costs, limiting supply, and ultimately making housing less affordable for Americans.

The Study: A Data-Driven Look at the Rental Market

The research, conducted by MetroSight economists, is one of the most comprehensive examinations of the long-term impacts of rental regulations. Drawing on data from over 2,100 multifamily properties and covering more than 600,000 rental units across 50 markets from 2004 to 2019, the findings are statistically robust—and deeply concerning.

By analyzing the effects of specific regulations on operating costs, vacancy losses, and investment behavior, the study paints a clear picture: overregulation often backfires, making housing more expensive and less available.

Key Findings: How Regulation Impacts Rent

1. Source-of-Income Laws

These laws aim to prevent housing discrimination by requiring landlords to accept all legal sources of income, including government vouchers. But the unintended consequences are clear:

• Vacancy losses increase by 10.4% due to slow and complex voucher approval processes.
  
  
• Collection losses jump by 12.5% from irregular payments tied to subsidies.
  
  
• Utility costs rise by 9.4%, often because of missed payments from tenants with unstable income.
  
  

2. Eviction Regulations (Just-Cause & Right-to-Counsel Laws)

Designed to protect tenants from unfair evictions, these policies can severely impact landlords’ ability to manage risk:

• Collection losses surge by 37.5%, reflecting delays in rent recovery.
  
  
• Insurance premiums increase by 14.3%, due to perceived higher risks.
  
  
• Utility costs go up by 13.2%, with landlords covering unpaid utilities for tenants who stay past lease expiration.
  
  

3. Resident Screening Restrictions

While these policies aim to broaden access to housing, they also limit landlords’ ability to vet tenants effectively:

• Repair and maintenance costs increase by 12.8%, likely due to higher property damage rates.
  
  
• Capital expenditures rise 17.2%, as landlords upgrade units to offset the risks of limited screening.
  
  
• Utility costs grow by 9.8%, often due to concessions needed to attract qualified renters.
  
  

The Bigger Picture: Good Intentions, Bad Outcomes

These regulations are typically enacted to protect renters, especially low-income and vulnerable populations. But when operational costs skyrocket, rental providers are forced to pass those costs on to tenants—or opt out of the market altogether.

This creates a vicious cycle:

• Costs go up →
  
  
• Developers build less housing →
  
  
• Vacancies drop →
  
  
• Rents continue to rise
  
  

Rather than solving affordability, overregulation may be making it worse.

What Should Policymakers Do Instead?

This report doesn’t argue against tenant protections. Instead, it urges data-driven, balanced solutions that work for both renters and housing providers.

Here’s what that looks like:

• Streamlining the Housing Choice Voucher process to reduce administrative friction.
  
  
• Focusing on mediation and support services instead of prolonging eviction timelines.
  
  
• Supporting housing providers with incentives for affordable housing development.
  
  
• Encouraging responsible tenant screening that balances fairness with risk management.
  
  

Conclusion: A Smarter Path to Affordability

Housing affordability is a shared goal. But the path to get there isn’t through one-size-fits-all mandates. As the report shows, the cost of overregulation is real—and it's hurting the very people it's meant to help.

The future of rental housing depends on smarter policies, open dialogue, and solutions that preserve both access and sustainability.