“Regulations—meant to bolster housing security, community vitality, and infrastructure—appear to be understudied factors that paradoxically reinforce problems."
Should you invest in apartment markets with increasing or already-high tenant protections? The quote above highlights the core questions in today’s issue - the actual impact of so-called “tenant protection” policies as viewed from a dispassionate investment perspective. You are likely to be surprised.
The instinctive response to investing in regulated markets is an emphatic “no,” thinking that with tenant protections comes an erosion of upside including limits on renewal-rent increases, less ability to evict non-paying residents and lots of administrative burden. Maybe true, but let your best investing self hear this: Strong tenant-protection laws drive rents higher and vacancies lower, according to new research.2
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