Affordable Housing, Community Development

AEI Study Suggests Reduced Regulations Lead to Lower Rents

American Enterprise Institute (AEI)

The American Enterprise Institute (AEI) suggests that reducing regulations for multifamily developments can lead to lower tenant expenses, due to the reduction in construction time and other cost impediments. This flexibility would increase developer competition to build the housing that the market is currently demanding, but whose development costs increase the ultimate expense to the occupants.

The authors argue that the reduced costs resulting from fewer regulations and increased competition will be passed down to renters. A reduction in development expense would create more affordable housing in more locations, thereby increasing access to employment for residents, as well as reduce dependence on subsidies currently used for affordable housing creation. 

The authors propose that affordable housing can be generated through cost reductions made possible with higher levels of density, reduced parking, expedited processing, etc. and therefore scare subsidy can be preserved for the lowest income residents.

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