In Depth: Modeling the Financial Impacts of Rent Stabilization in Minneapolis

October 28, 2022  

In Depth: Modeling the Financial Impacts of Rent Stabilization in Minneapolis

The In Depth section on HUD User’s Regulatory Barriers Clearinghouse (RBC) takes a closer look at innovative state and local strategies, activities, and plans to mitigate the impacts of regulations on the development of affordable housing. Each In Depth article highlights a particular plan, ordinance, or strategy in the RBC database and elaborates on aspects such as the approval process, stakeholder participation, and the progress made in reducing regulatory barriers.

In response to a renewed interest in rent stabilization policies to counteract increased housing costs, researchers at the University of Minnesota’s Center for Urban and Regional Affairs modeled the potential impacts of hypothetical rent stabilization policies in Minneapolis. In one model, the authors compare actual rent increases between 2008 and 2019 with increases that would have been allowed under four hypothetical rent caps. In the second model, researchers analyzed the impact on property owners’ return on investment, and they consulted with landlords, developers, investors, and lenders to understand their expectations. The researchers subsequently found that these rent stabilization policies would likely not have significantly affected most property owners’ return on investment.

Visit HUD User’s RBC In Depth age to learn more about the Minneapolis study, as well as other plans and initiatives that state and local governments have enacted to reduce impediments to affordable housing.