Rent Limit Policy

Background

In 2022, the ARCH Executive Board initiated a process to explore policies for how rent limits are increased within local affordable housing programs. Currently, most programs allow rent limits to increase in proportion to overall household incomes in the region, using a metric known as the Area Median Income – this has made increases difficult to predict, and led to high increases in recent years. ARCH’s initial focus is on affordable housing programs where affordable units are mixed with private market rate units, with affordable units typically making up about 10% of the units in a project. ARCH intends to work with other public agencies to explore policies for projects that are 100% affordable.

To guide the process, the ARCH Board set of the following goals for the policy:

  • Reduce the trend toward increasing cost burden among renters of affordable units

  • Provide greater predictability for tenants and owners

  • Create regulations that support the financial feasibility of housing development based on common underwriting standards among investors and lenders

  • Minimize administrative burden for property managers and ARCH to oversee compliance

  • Avoid unintended consequences

Policy Development Process

Over several months, ARCH conducted a robust stakeholder engagement process, with input gathered from developers, property managers, housing authority/nonprofit housing providers, financial institutions, other public agencies and groups representing tenants. Based on that input, the ARCH Board selected a number of options to continue discussing (background available here), and tasked a workgroup to bring diverse perspectives together and refine the options. The workgroup met in early 2023 and completed a Final Workgroup Recommendation that was shared with the ARCH Board in July. This was used to further narrow the options for consideration.

Public comment was collected over two months on several options, including a Tenant-Based 3% Cap, Tenant-Based 5% Cap, Tenant-based Graduated Cap between 3-9%, and Tenant-based Graduated Cap between 3-6%. ARCH hosted two events to explain the rent limit policy options and answer questions and concerns. A total of 243 unduplicated survey responses were submitted, along with written comments.

Policy Recommendation

On November 9, 2023 the ARCH Executive Board finalized a set of recommendations for further consideration, with agreement to continue conversation as the policy is considered by ARCH members. Details on the recommendation, public input received and overall policy process may be viewed in the final memo: