The National Multifamily Housing Council (NMHC) brings its members together each year to network with peers and attend first-hand sessions led by industry experts. The overall perception of this edition, which took place in San Diego, California, at the end of January, was that a more favorable context for the sector is on the horizon, with a substantial turnout indicating that the multifamily industry is still surviving. The following are some of our highlights from this 2024 Annual Meeting.

Rethinking rent control for a thriving multifamily market

Rent Control is a huge issue in the U.S. for the multifamily market, mainly because it discourages developers of all sizes from investing in rental opportunities. This was the general theme from the Open Session held by Sharon Wilson Géno, President at NMHC; Jim Schloemer, Incoming NMHC Chair and Chairman & CEO at Continental Properties; and Ken Valach, NMHC Chair and Chief Executive Officer at Trammell Crow Residential.

NHMC and other organizations, such as Housing Solutions Coalition (HSC), are working together to change current rent control legislation to address the huge housing crisis we continue to face in the country. Workforce and Affordable Housing industries are constrained by rent control and, therefore, cannot keep up with the increasing need for new apartments.

Rent control needs to be re-aligned for a more balanced and practical solution, so affordable and market-rate housing developers can re-engage and support the growth needs we face in the housing markets in general.

Sharon Wilson Géno pointed out at the Multi-Housing News’ quarterly podcast that Rent regulation has long been considered a strategy to make housing more affordable. It is anticipated that tenants will have easier access to affordable housing by limiting rents. However, decades of investigation have proven otherwise. A substantial quantity of this research was combined into a paper by NMHC members, which found that rent regulation has the opposite effect. According to this document, it creates an atmosphere in which capital movement is impossible if rent controls are in effect. This decreases housing options while, ironically, increasing costs in areas where rent stabilization policies are adopted.

2024 Outlook: a transitional year

On the other hand, economists are seeing signs of stabilization, even turning a corner into a positive. This was the main takeaway from the Uncertainty in The Capital Markets session, including experts like Susan Mello, Executive Vice President/Head of Capital Markets at Walker & Dunlop; Kelli Carhart, Executive Managing Director at CBRE; Michael Collins, Managing Director & Senior Portfolio Manager at PGIM; Hessam Nadji, President & CEO at Marcus & Millichap, and Ralph Pace, Executive Vice President & CRE Central NW Region Manager at U.S. Bank.

All the authorities in the field agreed and believed that we've seen the worst of the downturn, and though a bit of an anomaly, employment rates and consumer stability are good and are signs that we are on a "soft landing." In an optimistic summary, things shouldn't get any worse than they were in 2023. Although loans and borrowing criteria will still be challenging, the Panel believed this is a manageable problem. Moreover, even though the presidential elections are bringing some uncertainty, there is optimism that the market will stabilize this year.

"2024 will be a transition year. Over the last year, we have experienced what could be described as a 'perfect storm,' driven by various factors. Firstly, there is the high-interest-rate environment, which saw significant shifts throughout 2022 and 2023. Then, we have a variety of regulatory things coming out of the federal government that will regulate the rental housing industry in a way that it hasn't been regulated before, so those are things that investors and stakeholders in the sector are looking at very carefully"

Sharon Wilson Géno - NMHC

Despite the challenges and uncertainties discussed at the meetings, the industry is optimistic about the year ahead. The sessions highlighted the need to reevaluate rent control policies to encourage affordable and market-rate housing investment. Economists and industry experts expressed cautious optimism, pointing to signs of stabilization and a soft landing after the last recession. Although challenges such as high-interest rates and regulatory changes remain, stakeholders are confident that 2024 will be a year in which the market will stabilize.

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