Rising Rent Control Leading to Falling Development and Investment
WASHINGTON--(BUSINESS WIRE)--Oct 22, 2019--
An increasing number of jurisdictions recently have imposed rent control or are seriously considering doing so, leading many market participants to reconsider their investment decisions, according to the NMHC’s Quarterly Survey of Apartment Market Conditions, conducted in October 2019. Rent control legislation is continuing to expand with 58 percent of respondents saying that they operate in jurisdictions that have either recently imposed rent control or are seriously considering doing so. Of respondents who operate in these markets, over one-third (34 percent) have already cut back on investment or development, up from 20 percent last quarter, while an additional forty-nine percent are considering doing so going forward.
While rent control has led to increased concerns, 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. “Twenty percent of respondents reported improving market conditions, compared to just 12 percent who observed a looser market. Lower interest rates continue to create a more favorable environment for debt financing, as 58 percent of respondents reported improving conditions.”
About the Survey:
The October 2019 Quarterly Survey of Apartment Market Conditions was conducted October 7-14, 2019; 102 CEOs and other senior executives of apartment-related firms nationwide responded.
Based in Washington, D.C., the National Multifamily Housing Council (NMHC) is the leadership of the three trillion-dollar apartment industry. We bring together the prominent apartment owners, managers and developers who help create thriving communities by providing apartment homes for 39 million Americans. NMHC provides a forum for insight, advocacy and action that enables both members and the communities they help build to thrive. For more information, contact NMHC at 202/974-2300, e-mail the Council at email@example.com, or visit NMHC’s web site at www.nmhc.org.
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CONTACT: Colin Dunn
KEYWORD: UNITED STATES NORTH AMERICA DISTRICT OF COLUMBIA
INDUSTRY KEYWORD: CONGRESSIONAL NEWS/VIEWS PUBLIC POLICY/GOVERNMENT PUBLIC POLICY OTHER POLICY ISSUES RESIDENTIAL BUILDING & REAL ESTATE COMMERCIAL BUILDING & REAL ESTATE CONSTRUCTION & PROPERTY
SOURCE: National Multifamily Housing Council (NMHC)
Copyright Business Wire 2019.
PUB: 10/22/2019 10:44 AM/DISC: 10/22/2019 10:44 AM