Resident screening laws are meant to prevent housing providers from considering past legal history when vetting applicants. Properties operating under these regulations have experienced greater revenue losses and operational expenses in utilities and repair and maintenance. From the perspective of property owners, these restrictions can increase risks associated with selecting a rental applicant, with limited access to background information potentially increasing the likelihood of nonpayment, lease violations or property damage.

“These laws are well-intentioned, but as they have grown more commonplace, their impact on rental market dynamics and the housing supply warrants examination,” the report said. “Economic theory suggests that when housing providers face higher operating costs, they pass some of those costs to residents in the form of higher rents.”

Meanwhile, state preemption laws standardize regulations at the state level and reduce the administrative complexity of localized ordinances. Preemption laws effectively bar cities and counties from approving rent controls, eviction protections or other regulations that go beyond or fall short of state standards. By standardizing regulation at the state level, preemption reduces costs and operational risk and establishes a more predictable environment for multifamily operators, said the report.

“While resident protections are intended to address housing insecurity and promote equitable access to safe housing, the financial burden these regulations place on multifamily owners and operators might unintentionally discourage capital investment and constrain supply, ultimately hurting renters.” the report said. “A nuanced policy approach that incorporates the viability of multifamily rentals for property owners alongside resident protections could mitigate these unintended consequences and support the long-term health of rental markets."