As housing prices remain high across the nation, the Biden administration is taking action. The administration announced new actions earlier this week to protect access to housing and make rentals more affordable.
According to the White House, roughly 35% of the U.S. population — or over 44 million households — live in rental housing, but there are no comprehensive federal laws to protect renters. While not binding, the “Blueprint for a Renters Bill of Rights” offers guidelines for keeping renters in affordable housing, along with “access to safe, quality, accessible and affordable housing” and “clear and fair leases.”
The federal government and numerous federal agencies will take action on these and other issues outlined in the blueprint. The administration said it will also launch the “resident-centered housing challenge,” which leans on housing providers and state, local and tribal governments to expand access to housing through stronger policies. The challenge is set to take place this spring and will affect more than 15 million rental units.
Rent hike protections
Nearly one-third of all rental units nationwide are financed with federally backed mortgages — and the blueprint may help curb some of the steep rent price increases for these properties. The Federal Housing Finance Agency (FHFA), along with Fannie Mae and Freddie Mac, stated in the blueprint that the agencies will consider the establishment of tenant protections to limit “egregious rent increases” for properties purchased with certain types of federal mortgages.
In addition, the Federal Trade Commission (FTC) stated that it will use its authority to “take action against acts and practices that unfairly prevent consumers from obtaining and retaining housing” — including high application fees, deposits and background check screening algorithms that do not conform to the Fair Housing Act.
The focus will also be put on the multifamily market. The Federal Housing Finance Agency (FHFA) stated that it will launch a public process to examine renter protections and rent hike limits, which aims to increase affordability of multifamily rental properties.
The FHFA will also require half of all Freddie Mac and Fannie Mae multifamily purchase loans in 2023 to be “mission-driven.” Fannie Mae provided more than $69 billion in debt financing to support the multifamily market last year.
But while these guidelines are intended to help limit high rent increases, organizers with People’s Action told the Washington Post that the policies are unlikely to “change tenants’ lives materially today” due to a lack of binding conditions on matters like federal financing.
“The White House announcement introduces potential for agency-level action but falls short of issuing directives to regulate rent and address consolidation of the rental market,” said Tara Raghuveer, the homes guarantee campaign director at People’s Action, told the Washington Post.
“The rent is too … high, and landlords, many who receive federal financing and subsidies, made record-setting profits in the past two years. There is much more the president can do to provide material relief to tenants, and we’re counting on this administration to continue working with our campaign to make it happen.”
More than 2 million eviction filings and approximately 900,000 evictions occurred every year prior to the pandemic, which disproportionately affected Black women and children, according to the report.
And, according to reports, most rental assistance — including the approximately $47 billion the Biden administration earmarked for rental assistance programs during the COVID-19 pandemic — has nearly dried up or failed to reach at-risk tenants. That puts at-risk renters in a precarious position, one that could lead to eviction.
The blueprint’s eviction guidelines aim to curb some of the potential issues. According to the blueprint, if an eviction is filed, tenants should get 30 days’ notice and counsel during an eviction proceeding.
In addition, the Department of Housing and Urban Development (HUD) will award $20 million for the Eviction Protection Grant Program to fund the provision of legal assistance by non-profit and government organizations to low-income evicted tenants or those at risk of eviction.
But while eviction protections may be in the blueprint plans, the guidelines have their fair share of opposition.
Bob Pinnegar, the president and CEO of trade group the National Apartment Association, told CNBC that the industry is opposed to the expansion of federal involvement in the landlord-tenant relationship.
“Complex housing policy is a state and local issue and the best solutions utilize carrots over sticks,” Pinnegar said.
Protections for military members, disabled tenants
Other protections in the blueprint focus on military members and disabled tenants. The Department of Justice (DOJ) stated in the blueprint that it has the duty to guarantee housing to military members and to assist them in housing inspections before signing a lease. It will also assist in rent negotiation, lease reviews, and addressing discrimination complaints.
The Department of Housing and Urban Development (HUD) says it plans to improve its accessibility standards for disabled tenants, acting on the feedback of tenants and advocates.
The United States Department of Agriculture (USDA) will also ensure that tenants who are seeking compliance with the terms of their leases can do so without retaliation risks. In addition, the USDA is developing a lease structure that follows the HUD Section 8 model.
“We are heartened to see the Blueprint outline the need for federal, state, and local governments to protect against source of income discrimination; solutions to improve the Section 504 program which is essential to supporting housing for people with disabilities; and the need for guidance on the use of tenant screening algorithms that create barriers for renters and may violate the Fair Housing Act,” Nikitra Bailey, executive vice president of the National Fair Housing Alliance (NFHA), said in a statement.
Will the guidelines be enough?
While the guidelines outlined in the blueprint are a start, chances are that they won’t curb the rental crisis in America, according to Diane Yentel, president and CEO of the National Low Income Housing Coalition.
“The hard truth is that administrative action on its own can’t resolve the housing crisis that we’re in,” Yentel told the Washington Post. “It’s going to require major action from Congress, and unfortunately, the opportunity we had through Build Back Better passed by … We are clear-eyed about the limitations of administrative actions but are still pushing to do all we can now. The need is greater than ever.”