Rent control isn’t the answer. 

The data shows rent control actually makes housing more expensive, not less. A rent control study conducted by two Stanford University economics professors found that rent control laws in San Francisco led to a 25% decrease in rent controlled housing supply and a rent increase for everyone not in rent controlled housing. Overall, rents increased more than if rent control hadn’t been in place, the professors concluded. 

Still, the housing affordability crisis is real, and we need a solution, or, better yet, several solutions. That’s where multifamily innovation comes into play. And many of our industry’s brightest minds are already on the case, developing solutions to increase supply at lower costs. 

Some of these, which will be featured in a session at MICA 2020, include:

Modular construction. This refers to a process in which large portions of a building are created offsite, transported to the development site and then put into place. Because manufacturing processes are more efficient than custom building on site, modular construction can substantially decrease the cost of developing new communities. 

Advocates of the process say it could significantly reduce the amount of rent necessary to generate enough NOI to make the investment in new affordable and workforce housing worth it. Similarly, the 3-D printing of building components and structures holds promise in this regard as well.

Building equity while renting. These programs allow renters to create equity when they pay their rent on time and in full. After a certain period of time, residents are eligible to receive a cash payment that they can use to make a down payment on a home, pay off debts, invest or use in whatever way they want. 

These programs help renters eventually buy new homes outside of urban markets, freeing up rental inventory, which would theoretically stabilize rent increases. After all, the affordability crisis is a result of supply and demand economics.

Co-living apartment communities. These properties are ones in which residents have private bedrooms but share other spaces in a unit – kitchens, bathrooms, living rooms, etc. The communities are able to offer much more affordable rents. 

Co-living empowers developers and renovators to create more apartment homes in every community in less space, increasing inventory substantially. By increasing supply, it also has the added effect of stabilizing rent in the market as a whole.

In the end, the multifamily industry is an innovative one. That capacity for innovation could and should be put to use to find every way possible to make more apartment homes more affordable for more residents.