Biden has power to impose rent control, housing advocates say

By Meir Rinde,
Refuge Strength

Progressive advocacy groups are calling on the Biden administration to impose rent controls on tens of millions of homes in response to soaring rents.

With rents up 5.8% nationwide from a year ago and some metrics showing even larger increases, the president must use his authority over the Federal Housing Finance Administration and others agencies to impose rent regulations on borrowers of federally backed mortgages, according to the coalition.

“The biggest bill for every American household is their housing bill, whether it’s their mortgage or their rent. You can cut back a little on gas or some things at the grocery store; you cannot reduce the amount you pay for rent. The alternative is homelessness,” said Tara Raghuveer, Homes Guarantee campaign director at People’s Action.

A private sector report based on new leases found that rents increased by 12.3% from July 2021 to July 2022. The average monthly asking rent, or the amount reported by landlords looking for tenants, exceeded $2,000 for the first time in May, and eviction filing rates are hitting pre-pandemic averages, according to a letter from the National Low Income Housing Coalition and National Housing Law Project sent Aug. 16 to FHFA chiefs , HUD, Treasury and other agencies.

Contributing factors include real estate investors buying units at low prices and raising prices, as well as growing demand, limited supply and broader inflation, wrote NLIHC President Diane Yentel and Director NHLP executive, Shamus Roller. The Federal Reserve’s interest rate hikes intended to tame inflation have made mortgages more expensive and discouraged home buying, pushing more people into the rental market and further pressure on investors. price, according to advocates.

Yentel and Roller note that while Biden signed the Cut Inflation Act in August, the new law “does nothing to address skyrocketing rents and shrinking housing supply.”

“Without federal action, housing will be a persistent driver of inflation, and rising rents will hit the lowest-income Americans the hardest. For this reason, it is even more important that the administration take immediate action to keep families in stable housing. Failure to do so would exacerbate homelessness, poverty and racial inequality,” they wrote.

The Homes Guarantee coalition of more than 220 tenant unions, community organizations and lawyers argues that there are precedents supporting the legality of federal rent regulation. In March 2020, the CARES Act imposed a four-month eviction moratorium for eligible tenants in homes participating in federal assistance programs or whose mortgages had federally guaranteed financing.

“There is clear and recent precedent for the FHFA to take this kind of action,” Raghuveer said. “The federal government is leaving a lot of power on the table if it doesn’t take seriously its role as regulator of these massive flows of public funding and public subsidies that go to the private market. This is the leverage the federal government has in the housing market and it is not currently using it.

The coalition wants Biden to declare a state of emergency on housing and issue an executive order protecting tenants of federally subsidized housing and private rental housing with federally backed mortgages from unreasonable rent hikes, wrongful evictions, denial of lease renewal and retaliation for the organization. Raghuveer says it would apply to 43.6 million rental units across the country.

The president is also expected to convene an interagency task force to work on longer-term efforts to regulate rents and ensure tenant rights for all tenants, such as legal representation in eviction proceedings, and hold a summit. at the White House on protecting tenants, they say.

In addition to having government-sponsored companies Fannie Mae and Freddie Mac impose new regulations, the groups want the Federal Trade Commission to prosecute landlords who impose excessive rent increases, and HUD to demand jurisdictions investigate. on rapidly rising rents and enact rent controls as part of their duty to positively promote fair housing.

Advocates say the Securities and Exchange Commission should require public companies that own or manage rentals to disclose rent increases and investigate companies that engage in ‘manipulative and deceptive practices’ in connection with rent. rental-backed securities. They are calling on the Treasury to establish rent regulation for Emergency Rent Assistance Program funds and to act to discourage non-renewals of leases for LIHTC-funded properties.

The coalition also wants to call on the Consumer Financial Protection Bureau to investigate business owners for using unfair tenant screening and debt collection practices to discriminate against tenants or collect pandemic rent arrears.

Raghuveer argues that the unprecedented housing crisis has made such executive actions politically feasible.

“Until now, rent control and rent regulation has been a third rail political issue, completely untouchable by anyone at any level of government, let alone the federal government. Now, given the severity of the inflation crisis and the pain with which it is hitting the wallets of American households, people’s hunger for the federal government and especially the president to act is changing,” she said.

Fifty-one percent of likely voters think Biden should use his executive power to deal with housing costs, according to a recent Data for Progress survey conducted for the Homes Guarantee campaign. That includes 76% Democrats, 46% independents and 30% Republicans. When asked who they blamed for rising rents, respondents largely cited inflation (43%), followed by landlords (22%) and Biden (19%). The survey did not ask direct questions about rent control.

A delegation from Homes Guarantee recently traveled to Washington to pressure Biden to act. Raghuveer said the coalition hasn’t heard a direct response, perhaps because the administration was intensely focused on getting the Inflation Reduction Act through Congress.

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