April 15, 2025
If you’ve been in the multifamily space recently, you’ve probably felt the impact of new rent control laws and tenant protections being rolled out across major cities.
Whether it’s New York, California, or Oregon, the shift is clear—governments are stepping in to stabilize housing costs, and it’s starting to shake up how investors approach multifamily properties.
Rent caps and tenant-friendly legislation may be great for affordability, but they’re adding new layers of risk and complexity for property owners.
Investors are now facing stricter limits on how much they can raise rents year-over-year, even after units turn over. That means less upside potential and a direct hit to net operating income (NOI)—which, as you know, has a big impact on property valuation.
Multifamily assets used to be a go-to for cash flow and appreciation, especially in high-demand urban markets. But now, with these regulations tightening margins, many buyers are rethinking their strategy.
We’re seeing some capital shift toward markets that are still landlord-friendly—places like Texas, Florida, and the Southeast in general, where returns are higher and the red tape is lighter.
On the flip side, these regulatory changes are also creating opportunity. Owners who are over leveraged or unable to adapt may look to exit, giving savvy buyers a chance to negotiate deals—especially if you can bring creativity to the table through repositioning or value-add plays that still make sense within rent-regulated environments.
The game has changed. Underwriting needs to be tighter, market selection more strategic, and your exit plan more flexible. If you’re holding multifamily or thinking of acquiring, make sure you're accounting for the long-term impact of rent control laws in your models—not just what the deal looks like today.
Disclaimer: This content is meant for informational purposes only and is not intended to be construed as financial, tax, legal, or insurance advice.
