Mandatory rent control and rent stabilization policies like the ones under consideration by the federal government “have proven time and time again to increase rents, reduce the capital needed to boost the supply of housing, and ultimately hurt renters,” the American Seniors Housing Association and 17 other associations representing housing providers and lenders told Federal Housing Finance Agency on Thursday in a letter.
The letter to FHFA Director Sandra Thompson, which the groups said expressed their “strong concern that rent control mandates will exacerbate the housing affordability crisis,” was sent as the independent agency considers implementing rent regulation as a condition of Fannie Mae and Freddie Mac-backed financing for multifamily properties. The FHFA oversees Fannie Mae and Freddie Mac, government-run private entities collectively known as the Enterprises.
Mandatory rent control is “failed policy” that is “counterproductive” and “nothing more than a politically expedient response to the increased cost of housing and other essential goods and services,” the groups said. If rent regulation goes forward, they added, then rental housing supply could be reduced and costs could increase, “especially for those most in need.”
Instead, according to the associations, the best way to ease increasing rents is to create voluntary incentives within Fannie Mae and Freddie Mac programs to expand the supply of affordable housing. The groups called on Congress, the FHFA and the Enterprises to put more funding and resources into programs that assist families in need and into programs that have the potential to increase development and preservation opportunities for households with low and moderate incomes.
“Our organizations have long been strong supporters of voluntary programs supported by the Federal government, including the Low-Income Housing Tax Credit (LIHTC), expansion of the Section 8 programs, and the Enterprises programs that provide the financial resources necessary for developers to create more affordable units,” the groups wrote. “Unfortunately, only 1 in 4 Americans that need housing subsidy receive it, as not nearly enough resources have been invested in these voluntary efforts over time, resulting in a particularly severe shortage of affordable housing.”
In addition to ASHA, groups signing the Aug. 10 letter include:
- Council for Affordable and Rural Housing
- Commercial Real Estate Finance Council
- Institute of Real Estate Management
- Leading Builders of America
- Manufactured Housing Institute
- Mortgage Bankers Association
- NAIOP, the Commercial Real Estate Development Association
- National Apartment Association
- National Association of Home Builders
- National Association of Realtors
- National Association of Residential Property Managers
- National Housing Conference
- National Housing & Rehabilitation Association
- National Leased Housing Association
- National Multifamily Housing Council
- The Real Estate Roundtable
The Aug. 10 letter followed a July 31 one sent to the FHFA Office of Multifamily Analytics and Policy by the same 18 groups.
That letter was in response to FHFA’s May 30 request for input regarding “Tenant Protections for Enterprise-backed Multifamily Properties” in the areas of access to housing and information, tenant housing stability and risk management, among others. Comments were due July 31.
“Imposing additional obligations for Enterprise multifamily borrowers will create instability in an already challenged market and undermine the important goals of fostering a healthy housing market, increasing supply, and creating successful apartment communities,” the groups told FHFA. “Inherent in ensuring stability for our nation’s renters, is maintaining the current and future viability of the rental housing supply in this country. As such, we respectfully advise FHFA to refrain from placing new or expanded federal obligations on private rental housing providers and instead focus on leveraging federal resources in the form of incentives to bolster new affordable housing.”
In January, the White House announced new actions meant to protect renters and promote rental affordability, including FHFA’s planned “public process to examine proposed actions promoting renter protections and limits on egregious rent increases for future investments.”