“Rental prices in some of the country’s largest cities are falling—some by almost 45 percent, according to new data” from “the top 65 metropolitan areas in the United States.” That data “reveals that cities that have recently enacted pro-housing policies have experienced the most significant year-over-year decline in rental prices nationwide,” reports Reason Magazine:
Sarasota, Florida, is the city with the highest annual decline, with a 42.67 percent drop (from $3,290 to $1,886) in average rent from January 2024 to January 2025. In recent years, the City Commission has adopted a series of pro-housing policies aimed at addressing the city’s housing crisis, such as the easing of restrictions on mixed-use and higher-density developments in 2022. In 2024, the commission passed several additional measures to relax density restrictions…
Providence, Rhode Island, the city with the second-highest year-over-year decline, saw a 19.22 percent drop in monthly rent, from $2,513 to $2,030 [after the state of Rhode Island] passed housing legislation streamlining permitting for land use…and easing restrictions around repurposing existing structures for housing….
The completion of multifamily housing units is also driving rent decreases in Austin, Texas, and Cape Coral, Florida. Across the U.S., multifamily housing construction has slowed from its pre-COVID levels, partly due to regulatory hurdles, high costs, and concerns about affordability. Yet cities with the steepest rent declines, such as Austin and Cape Coral, are notably issuing building permits at or above their pre-pandemic rates…
Minneapolis, which experienced an 11.14 percent annual decrease in rent, saw a 12 percent increase in housing supply between 2017 and 2022, partly fueled by its 2019 zoning reforms. In the first five years after these reforms passed, Minneapolis rents decreased by 4 percent…Minneapolis was also the first major U.S. city to end single-family-only zoning.
On the other hand, rent control is killing construction of multifamily housing in Montgomery County, Maryland’s most populous county.
Colorado is now allowing single-stairway buildings to reduce housing costs.
North Carolina is moving toward eliminating parking mandates that drive up housing costs.
High-cost, low-productivity construction methods are promoted by federal housing regulations and subsidies:
construction productivity in 2020 was 40% lower than in 1970, even though productivity in other sectors of the economy more than doubled during that time. While local regulatory policy is unquestionably a factor in this decline, restrictions on the methods of housing production also affect the supply of affordable housing. Prefabricated factory-built housing costs about one-third as much as traditional “stick-built housing,” but it constitutes just 10% of new single-family home construction today. In the 1970s, it was 60%. That dramatic decline is thanks to monopolistic government policies, from mortgage subsidies to federal safety standards, that irrationally favor stick-built methods over factory-built. To make more housing available to more Americans at lower prices, the federal government must get out of the way and allow housing construction to modernize the same way other sectors of the economy have.
Federal policies promote “‘stick-built housing,’ when buildings are constructed on-site by traditional construction methods. This method requires highly skilled, frequently unionized workers to produce homes on-site. Pre-fabricated factory-built housing, by contrast, costs about 1/3 as much per square foot.”
