Like a lot of U.S. cities, the Boston area has been grappling with how to make rental housing affordable. Now the Boston Federal Reserve is joining a growing chorus around the country with a solution: Relax zoning restrictions on density so more apartments can be built.

“Density restrictions play a key role in limiting multifamily supply,” the Boston Fed’s New England Public Policy Center said in a new study. Allowing more density combined with relaxing height restrictions is the most “fruitful policy reform for increasing supply and reducing multifamily rents.”

It is a similar consensus playing out across the country as cities and states try to address housing shortages and affordability. Spurring much of the urgency is record growth in apartment and other residential rents across the country last year that has stayed above historical levels this year.

California has aggressively passed laws to address housing and affordability, including increasing density around public transit and opening underused or vacant commercial areas to housing development. Other states with legislation in the works include Oregon, Arizona, Maryland, North Carolina, Maine, Washington, New York and Massachusetts. But local municipalities often push back by asserting that zoning should be strictly within their power.

Boston-area rent growth hit record levels at 10.7% in both the three months of last year and the first quarter of this year, according to CoStar data. It has slowed to 5.9% year over year. The Boston metropolitan area, which includes parts of Connecticut, Rhode Island and New Hampshire, has a population of 4.9 million, the 11th most populous in the country.

Though rent growth in the Boston area is not as high as some markets in the Southeast where it topped 20%, Boston-area apartment rents are some of the priciest in the country. Average asking rents run $2,680 per month, more than $1,000 higher than the national average.

Massachusetts Gov. Charlie Baker signed into law in January 2021 a requirement that municipalities in the Massachusetts Bay Transportation Authority’s operating area allow multifamily development within a half mile of transit. Those rules are now in place and affect suburban cities more than Boston itself, where transit-oriented development has been occurring.

The Boston Fed study said the law could “result in greater housing supply and lower housing costs” to areas outside the urban areas closer to the city.

Regulations at all government levels account for 40.6% of multifamily development costs, including zoning requirements, according to a study the National Multifamily Housing Council released over the summer.

The Boston Fed study delved into “by-right” multifamily zoning law that says if only single-family houses can be built in an area, no special approval is needed.

“Prohibiting multifamily housing by right is the primary method of limiting multifamily housing of any type in Greater Boston,” the study said.

A 1969 Massachusetts law known as the Comprehensive Permit Law allowed local zoning appeals boards to approve housing developments under flexible rules if at least 20% to 25% of the housing had long-term restrictions to maintain affordability.

The Boston Fed’s report said that law “rarely substitutes for relaxing zoning regulations, particularly restrictions on multifamily housing.”

Ed Pinto, director of the housing center for the American Enterprise Institute, a nonpartisan think-tank that favors free-market approaches, told CoStar News the solution seems simple enough but the “not in my backyard” influence hinders efforts to change zoning requirements.

“The NIMBYs are basically shameless,” Pinto said, noting that they will argue on one hand they don’t want apartments and about-face to argue the need for affordable housing. 

The NMHC report noted that most of the 49 apartment developers surveyed said they encountered NIMBY opposition, which increased project costs by 5.6% to confront NIMBYism and delayed project completion on average by 7.4 months.

“Any steps local and state lawmakers take to expand the development and production of badly needed housing right now are steps in the right direction,” Paula Cino, vice president for construction, development and land use policy with the NMHC, said in an email statement.

She added: “Policymakers at all levels of government should be doing all they can to put forward creative and meaningful policies that make it easier to build new housing of all types and at all price points.”