Category: Affordable Housing

Roundtable Submits Comments to HUD on Barriers to Affordable Housing Development; NMHC Releases 2020 Outlook on States’ Rent Control Efforts

Posted on by Trey Jackson

The Real Estate Roundtable today submitted a suite of policy suggestions (revised January 21, 2020) to the Department of Housing and Urban Development (HUD) to improve access to affordable housing.  The comments respond to HUD’s Request for Information seeking public feedback on laws, regulations, land use requirements and administrative practices posing barriers to housing affordability and availability.

Roundtable Recommendations

The Roundtable’s comments offer policies intended to bring more safe, decent, and affordable housing within reach of indigent and low-income households.  It also urges HUD to focus on the scarcity of homes accessible to middle class families, and recommends policies to increase both purchase and rental options for teachers, first responders, and other contributors in America’s workforce. 

Recognizing “there is no single, best solution to promote housing affordability and increase housing supplies,” The Roundtable suggests a number of strategies to address the challenges and opportunities for public, low-income, and middle-class housing, including:

  • Expand the Low-Income Housing Tax Credit (LIHTC) program, and provide a similar tax incentive focused on housing development for America’s middle class;

  • Use GSE reform to re-focus the mission of Fannie Mae and Freddie Mac on liquidity in the mortgage markets for low- and middle-income home buyers, while also encouraging GSE interventions to enhance middle-class rental housing;

  • Reform procedures and rules under the Community Reinvestment Act (CRA), so banks can receive “credit” when they serve lending needs and increase housing supplies in middle-class neighborhoods (80-120 percent of Area Median Income);

  • Foster a Yes in My Backyard – or “YIMBY” – environment whenever states and cities seek the “carrot” of federal grants, that obliges localities to implement land-use laws to deliver high density zoning needed to entitle affordable housing projects;

  • Promote greater production of manufactured housing as a high quality, less costly alternative to site-built homes; and

  • Direct the General Services Administration to prioritize increasing affordable housing supplies when it disposes of surplus federal properties for re-development by states, localities, and the private sector.

The comments conclude with an assessment of rent control laws which have “a long-term effect to worsen the housing crisis,” The Roundtable wrote to HUD.  The letter notes that numerous studies show these laws decrease housing supplies and can illogically benefit high-income earners who have no incentive to move out of controlled units.

In a related development this week, the National Multifamily Housing Council (NMHC) released a report on “Rent Control: A 2019 Recap and a 2020 Look Forward,” which provides a national assessment of rent cap efforts by multiple states. The new report supplements NMHC’s Housing Affordability Toolkit that explains the cost drivers behind apartment development and delves into best practices to address the affordability challenge. 

During The Roundtable’s January 28 State of the Industry meeting in Washington, DC, a discussion of housing availability and affordability will feature Federal Housing Finance Agency Director Mark Calabria and Rep. Patrick McHenry (R-NC), Ranking Member of the House Financial Services Committee.

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HUD Requests Stakeholder Comments on Barriers to Affordable Housing

Posted on by Trey Jackson

[Left to right: Roundtable Chair Debra Cafaro (Ventas, Inc), HUD Secretary Ben Carson and Roundtable President and CEO Jeffrey DeBoer discuss affordable housing issues during The Roundtable’s Fall 2019 Meeting.]

The U.S. Department of Housing and Urban Development (HUD) on Nov. 22 published a Request for Information (RFI) seeking public comment on Federal, State, local, and Tribal laws, regulations, land use requirements, and administrative practices that may pose barriers to affordable housing development.

  • HUD is also asking stakeholders for their recommendations about innovative practices that promote increased housing supply.  (HUD news release, Nov. 26 and HousingWire, Nov. 27)
  • The RFI is part of an effort undertaken by HUD Secretary Ben Carson as chair of the White House Council on Eliminating Regulatory Barriers to Affordable Housing.  The Council’s eight Federal member agencies are tasked with engaging governments at all levels and private-sector stakeholders on ways to increase the housing supply and access to affordable housing.  (Roundtable Weekly, June 28)
  • HUD’s outreach to stakeholders is a result of President Trump’s June 25 Executive Order, “Establishing a White House Council on Eliminating Regulatory Barriers to Affordable Housing.”  State and local law barriers identified in the Order include overly restrictive zoning and environmental laws, rent regulations, excessive energy and water efficiency mandates, impediments to higher-density projects, time-consuming permit procedures, complex labor requirements, and inordinate development impact fees. (White House Fact Sheet, June 25)
  • Responses to HUD’s RFI are due by Jan. 21, 2020.  The Roundtable will submit comments after finalizing a multi-faceted housing availability and affordability strategy recommending policies that encourage:

• State and local governments to adopt and implement Yes in My Backyard (“YIMBY”) land-use policies such as high-density zoning and expanding by-right multifamily zoned areas, to entitle affordable housing projects;

• Development of low-income and workforce housing units as a priority when the U.S. government disposes under-utilized and surplus federal properties;

• Construction of manufactured housing – the only form of housing regulated by a Federal building code that includes standards for health, safety, and energy efficiency – as a gateway that opens the door for homeownership for millions of families;

• An assessment of how short-term rental platforms (like Air BnB and Vrbo) may reduce supplies of units otherwise available for long-term housing;

• Mortgage underwriting standards that reduce barriers for first-time buyers with student loan debt to also qualify for federally-backed FHA loans geared toward low- and moderate-income borrowers;    

• Increased support for HUD’s Section 8 voucher program to assist very low-income, elderly, and disabled Americans to afford housing in the private market; and

• Modernizing the role of Fannie Mae and Freddie Mac through GSE reform, to focus their mission on providing liquidity in mortgage markets geared toward low-income and middle-class home ownership.

On November 1, Roundtable President and CEO Jeffrey D. DeBoer raised these priorities in a housing affordability summit at the White House with HUD Secretary Carson and other industry leaders.  DeBoer’s comments followed on the heels of Secretary Carson’s remarks to The Roundtable several days prior during its 2019 Fall Meeting.  (Roundtable Weekly, November 1, 2019).    

Affordable housing will be a focus of discussion during The Roundtable’s Jan. 28-29 State of the Industry Meeting in Washington, DC.

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Senate Banking Committee Considers Legislation to Promote Affordable Housing; White House Hosts Housing Roundtable

Posted on by Trey Jackson

The Senate Banking, Housing, and Urban Affairs Committee on Thursday held a hearing, “Examining Bipartisan Bills to Promote Affordable Housing Access and Safety,” to discuss bipartisan legislation aimed at expanding access to affordable housing generally and improving safety conditions in federally-assisted housing specifically.

  • Among the bills considered at the hearing were:
    • the HUD Manufactured Housing Modernization Act (S.1804).  This bill would confirm for state and local recipients of funding from the Department of Housing and Urban Development (HUD) (such as Community Development Block Grants), that manufactured housing is eligible for public dollars for construction and repair; and
    • the Fostering Stable Housing Opportunities Act (H.R. 4300), which advanced unanimously by the House of Representatives’ Financial Services Committee in September.  This bill would authorize HUD to allocate Section 8 housing choice vouchers directly to any public housing agency that aims to assist youths aging out of foster care and at risk of losing their housing safety net.
  • Mark Yost (CEO, Skyline Champion Corp.) testified on behalf of the Manufactured Housing Institute (“MHI”) in support of S. 1804.  He stated that increased construction costs combined with labor shortages render manufactured housing a logical solution to help increase affordable housing options.  (Mark Yost Testimony)
  • The Roundtable advocates that safe, decent and affordable housing is essential to the well-being of America’s families, communities and businesses.  The Roundtable is developing a multi-faceted strategy and is assessing policies such as those that encourage:
    • State and local governments to adopt and implement Yes in My Backyard (“YIMBY”) land-use policies to entitle affordable housing projects, such as high-density zoning and expanding by-right multifamily zoned areas;
    • Development of low-income and workforce housing units as a priority when the U.S. government disposes under-utilized and surplus federal properties;
    • Construction of manufactured housing – the only form of housing regulated by a Federal building code that includes standards for health, safety, and energy efficiency – as a gateway that opens the door for homeownership for millions of families;
    • Increased support for HUD’s Section 8 voucher program to assist very low-income, elderly, and disabled Americans to afford housing in the private market; and
    • Modernizing the role of Fannie Mae and Freddie Mac through GSE reform, to focus their mission on providing liquidity in mortgage markets geared toward low-income and middle-class home ownership.
  • On November 1, Roundtable President and CEO, Jeffrey D. DeBoer, raised these priorities in a housing affordability summit at the White House with HUD Secretary Ben Carson and other industry leaders.  DeBoer’s comments followed on the heels of Secretary Carson’s remarks to The Roundtable several days prior at its 2019 Fall Meeting.  (Roundtable Weekly, November 1, 2019).    

The Roundtable will continue to work with our industry partners, the Administration, and Congress to implement a multifaceted strategy that addresses the nation’s housing affordability crisis.

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California’s Governor Signs Rent Control Law Amid Growing List of Jurisdictions Seeking to Address Housing Affordability

Posted on by Trey Jackson

California Governor Gavin Newsom (D) on October 9 signed into law a statewide rent cap of 5 percent plus inflation, along with enhanced tenant eviction protections.  California is now the third state in the nation – amid a growing list of other jurisdictions – to enact rent control laws in an attempt to address housing affordability problems.  (LA Times and Gov. Newsom website, Oct. 9 and Roundtable Weekly, June 21)

  • California’s law (AB 1482) is set to expire in 10 years – unlike New York, which permanently increased New York City rent control measures in June, while allowing other areas in the state to implement the policy.  In Oregon, a permanent statewide rent cap of 7 percent plus inflation was enacted in March. (Axios, Oct. 9 and NMHC interactive national map)
  • In a state of nearly 40 million people, California’s rent control measure could affect an estimated 8 million residents of rental homes and apartments. (Realtor Magazine, Sept. 12).  The 5% rent increase cap would not apply to housing built within the last 15 years or to single-family homes that are not corporate-owned.  (LA Times, Oct 8 and Curbed Los Angeles, Oct 10)
  • Gov. Newsom signed 18 other bills this week to address California’s housing affordability crisis, including measures to encourage construction of accessory dwelling units (ADUs), which encompass the renovation of existing garages into affordable housing. (KABC-TV, Oct. 10 and Newsom website, Oct. 9)
  • An interactive national map by the National Multi Housing Council (NMHC) details the trend in how various state capitals are attempting to address affordable housing through rent control measures. 
  • The rent control movement is partially influenced by a loose network of local activist groups that continue to organize successful efforts in some of the nation’s largest cities and states, according to an Oct. 3 article in The Real Deal.
  • “Although they are well-intended, we know from decades of experience that rent control regulations distort markets, create shortages, and depress business investments.  They often harm the communities they seek to help,” said Jeffrey D. DeBoer, President and CEO of The Real Estate Roundtable. “Policy makers should avoid rent control measures and rather seek solutions that grow America’s residential stock, to enable our communities to provide safe and decent housing for low-income families and the teachers and first-responders in our workforce.”
  • Housing affordability has emerged as a policy focus in this presidential campaign cycle.  The housing and real estate-related campaign platforms of the 12 candidates who will participate in the Oct. 15 Democratic primary are profiled by Bisnow this week.  (“Here’s Where All The Democratic Presidential Candidates Stand On Housing,” Oct. 8)

In June, the White House established a Council on Eliminating Regulatory Barriers to Affordable Housing, chaired by Housing and Urban Development (HUD) Secretary Ben Carson. (White House Executive Order, June 25).  The council includes members from across eight federal agencies who will analyze how federal, state, and local regulations impact the costs of developing affordable housing and the economy.  It will also recommend ways to reduce regulatory burdens at all levels of government that hinder affordable housing development. (White House Fact Sheet, June 25)

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California Law Reflects National Affordable Housing Trend in Rent Regulations

Posted on by Trey Jackson

California lawmakers passed legislation (AB 1482) September 11 that imposes a statewide cap limiting annual rent increases to 5% after inflation – the latest measure from a growing list of jurisdictions seeking to address housing affordability though rent regulations.  California Governor Gavin Newsom (D) has said he will sign the bill. (New York Times, Sept. 11 and NMHC, Sept. 12)

  • In a state of nearly 40 million people, California’s rent control measure could affect an estimated 8 million residents of rental homes and apartments. (Realtor Magazine, Sept. 12).  The 5% rent increase cap would not apply to housing built within the last 15 years or to single-family homes that are not corporate-owned. 
  • National Multifamily Housing Council (NMHC) President Doug Bibby responded, “After Californians overwhelmingly rejected the rent control ballot initiative less than a year ago, lawmakers today went against their constituents by passing a measure that will discourage investment, shrink the availability of affordable housing that already exists and squeeze even more people struggling in the housing market. This makes the problem worse. The housing affordability crisis is real, real Americans are being harmed by it every day and we need real solutions – not restrictive policies that we know don’t work.” (NMHC news release, Sept. 12)
  • An interactive national map, above, by the NMHC details the trend in state capitals addressing rent control measures.   In New York, a rent control law signed by Governor Andrew Cuomo on June 14 directly impacts about 40 percent of New York City’s apartment stock; freezes “stabilized” NYC apartments from moving to market rental rates; and discourages owners from modernizing aging housing.  (Wall Street Journal, June 14 and Roundtable Weekly, June 21).
  • Meanwhile, candidates on the 2020 campaign trail are offering plans to address the nation’s affordable housing needs. (NPR, June 18)  
  • Affordable housing proposals in Congress include an expansion of the low-income housing tax credit program (e.g., S. 1703,  H.R. 3077), and a similar tax credit geared to moderate-income, workforce housing (S. 3365, 115th Cong.).

Housing and Urban Development Secretary Ben Carson recently offered a strategy to boost affordable housing by encouraging localities to ease their own building restrictions. (Politico, June 14).  Secretary Carson is scheduled to discuss housing policy issues with Roundtable members during the organization’s Fall Meeting on October 30 in Washington.

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President Trump Establishes Council on Regulatory Barriers to Affordable Housing

Posted on by Trey Jackson

President Donald Trump signed an executive order Tuesday creating a White House Council on Eliminating Regulatory Barriers to Affordable Housing.  ( White House Executive Order , June 25).

  President Donald Trump signed an executive order Tuesday creating a White House Council on Eliminating Regulatory Barriers to Affordable Housing.   ( White House video  of the signing, June 25)  
  • Secretary of Housing and Urban Development (HUD) Ben Carson will chair the council, which will engage State, local, and tribal leaders to identify and remove obstacles that impede economic growth and the development of new affordable housing. (  White House video  of the signing, June 25)  
  • Carson told The Wall Street Journal this week, “These are things that can be solved. A lot of [these rules] have been on the books for excessive amounts of time. They’re not particularly relevant any more.” 
  • The council will include members from across eight Federal agencies who will analyze how Federal, State, and local regulations impact the costs of developing affordable housing and the economy.  It will also recommend ways to reduce regulatory burdens at all levels of government that hinder affordable housing development. (White House Fact Sheet, June 25)

According to the White House:  

  • Regulations are creating excessive costs that are holding back the development of needed affordable housing. 
  • Many of the markets with the most severe shortages in affordable housing have the most restrictive State and local regulatory barriers to development.
  • More than 25% of the cost of a new home is the direct result of Federal, State, and local regulations, with the price tag even reaching up to 42% for some new multifamily construction.
  • High housing prices are a primary determinant of homelessness, and research has directly linked more stringent housing market regulation to higher homelessness rates.  
  • State and local law barriers identified in Trump’s Executive Order – that will be assessed by the Cabinet-level council – include overly restrictive zoning and environmental laws, rent regulations, excessive energy and water efficiency mandates, impediments to higher-density projects, time-consuming permit procedures, complex labor requirements, and inordinate development impact fees. 
  • “These regulatory barriers … are the leading factor in the growth of housing prices” and “drive down the supply of affordable housing” in markets across the United States, the Executive Order states.  

The Real Estate Roundtable’s policy agenda likewise encourages government programs designed to increase the nation’s stock of affordable, low-income and market-rate housing, as opposed to rent control and other measures that constrict residential supplies.  (Roundtable Weekly, June 21)

New York Overhauls Rent Regulations as Affordable Housing Shortage Attracts National Attention

Posted on by Trey Jackson

Major changes to New York City’s rent regulations passed in Albany last week have drawn attention to a nationwide resurgence of rent control laws considered by cities and states across the nation.  ( Wall Street Journal , June 14).

By keeping more New York City apartments permanently in the regulated system, the new law will diminish the number of available market-rate units, drive-up market-rate rents, and perpetuate an imbalance in affordable housing supply and demand.  
  • The law signed by Governor Andrew Cuomo on June 14 directly impacts about 40 percent of New York City’s apartment stock and expands rent stabilization to counties across the state.  The law generally freezes “stabilized” NYC apartments from ever moving to market rental rates.  (New York Times ,June 12 and June 17).  
  • By keeping more apartments permanently in the regulated system, the new law will diminish the number of available market-rate units, drive-up market-rate rents, and perpetuate an imbalance in affordable housing supply and demand.  Affluent Manhattan residents in stabilized apartments who enjoy a rental windfall will stay in place, while lower-income residents in outer boroughs will likely bear higher rent burdens.  (Wall Street Journal, June 12) 
  • The New York law also dis-incentivizes owners from modernizing aging housing with new roofs, boilers, security systems, and other improvements.  By capping annual rent increases that an owner can charge for major building-wide capital investments, one critic has warned that the law could lead to a “shabbification of rental housing.”  (Citylab, June 13). 
  • Real Estate Board of New York (REBNY) President John Banks stated, “The harmful impact of this legislation will be profound for New York City’s economic future … This legislation will keep rent lower for some, but also significantly diminish housing quality and lead to less tax revenue to pay for vital government services.”  (REBNY statement, June 18) 

Affordable Housing: A National Issue

New York’s action is part of a growing trend of jurisdictions purporting to address skyrocketing housing costs though rent regulations.  Meanwhile, candidates on the 2020 campaign trail are offering plans to address the nation’s “affordable housing crisis.”  ( NPR,  June 18)  

    An  interactive national map provided by the National Multifamily Housing Council (NMHC) details the movement of state capitals eying rent control measures.   
    • An interactive national map provided by the National Multifamily Housing Council (NMHC) details the movement of state capitals eying rent control measures.  
    • A real estate industry coalition recently opposed a rent control measure under consideration in California.  In a letter to Sacramento lawmakers, the coalition explained that increasing housing supplies with new construction built by public-private partnerships will “help bring the price point down,” and that it is “more effective to tie assistance to a renter rather than a rental unit.” (NMHC, June 17) 
    • Proposals in Congress that aim to expand and incentivize the construction of affordable housing would be more effective in addressing the nation’s housing challenges (compared to government-mandated rental price-fixing).  Recently proposed measures would expand the low-income housing tax credit program (e.g., S. 1703,  H.R. 3077), and create a similar tax credit geared to moderate-income, workforce housing (S. 3365, 115th Cong.). 
    • Housing and Urban Development Secretary Ben Carson has offered a strategy to boost affordable housing by encouraging localities to ease their own building restrictions. Carson’s proposal has gained support of House Financial Services Committee Chair Maxine Waters (D-CA).  It would provide federal monetary incentives for local governments to ease land-use and zoning regulatory barriers that can feed into “NIMBY-opposition” against affordable housing and drive-up development and construction costs. (Politico, June 14) 

    “Although they are well-intended, we know from decades of experience that rent control regulations distort markets, create shortages, and depress business investments.  They often harm the communities they seek to help,” said Jeffrey D. DeBoer, President and CEO of The Real Estate Roundtable. “Policy makers should avoid rent control measures and rather seek solutions that grow America’s residential stock, to enable our communities to provide safe and decent housing for low-income families and the teachers and first-responders in our workforce.”

    House Financial Services Committee Releases Draft Legislation on Affordable Housing Infrastructure; NMHC Testifies on Issue

    Posted on by Trey Jackson

    House Financial Services Committee Chairwoman Maxine Waters (D-CA) released draft legislation calling for major investment in public and affordable housing before an April 30 hearing on “Assessing the Infrastructure Needs of America’s Housing Stock.”

    The “Assessing the Infrastructure Needs of America’s Housing Stock” hearing included testimony from Daryl Carter (Founder, Chairman and CEO of Avantha Capital) on behalf of the National Multifamily Housing Council and the National Apartment Association.

    • Chairwoman Waters detailed her funding proposals in the Housing is Infrastructure Act of 2019 in her opening remarks.  “I have put forth a discussion draft that would make the investments we need in our housing infrastructure and create jobs across the country,” she said. “We also need to consider ways to incentivize developers to reduce the energy costs of affordable housing and to create housing that accommodates generations of families living under one roof.”  (Committee hearing memo)
    • The hearing included testimony from Daryl Carter (Founder, Chairman and CEO of Avantha Capital) on behalf of the National Multifamily Housing Council and the National Apartment Association.    

    Carter’s testimony supported the efforts of Chairwoman Waters and detailed incentives for local governments to ease the development process.  He also specified several other policy steps to meet housing demand and affordability needs, including: 

    • Support Housing Finance Reform that Preserves the Multifamily Mortgage Liquidity Provided by the Government-Sponsored Enterprises (GSEs)
    • Expand and Enhance the Low-Income Housing Tax Credit (LIHTC)
    • Enact the Middle-Income Housing Tax Credit Act to Support Workforce Housing
    • Enhance Opportunity Zones to Incentivize Rehabilitation of Housing Units
    • Repeal the Foreign Investment in Real Property Tax Act (FIRPTA) 

    FIRPTA repeal is one of The Roundtable’s infrastructure policy recommendations submitted recently to the House Committee on Transportation and Infrastructure.  (Roundtable Weekly, May 3)

     

    Senate Confirms Mark Calabria as FHFA Director Overseeing Fannie Mae and Freddie Mac

    Posted on by Trey Jackson

    The Senate yesterday confirmed Mark Calabria, previous chief economist to Vice President Mike Pence, as director of the Federal Housing Finance Agency (FHFA) – the federal regulator overseeing Fannie Mae, Freddie Mac and the multi-trillion dollar Federal Home Loan Bank System. 

    The Senate yesterday confirmed Mark Calabria, previous chief economist to Vice President Mike Pence, as director of the Federal Housing Finance Agency (FHFA) – the federal regulator overseeing Fannie Mae, Freddie Mac and the multi-trillion dollar Federal Home Loan Bank System.

    • Calabria will now have broad influence over reshaping the role of the Government Sponsored Enterprises (GSEs) brought under government conservatorship during the financial crisis. 
    • Senate Banking Committee Chairman Mike Crapo (R-ID) said on the Senate floor yesterday that Calabria “committed to working with me, and other members of this body, to reach a comprehensive solution on ending the conservatorship of Fannie and Freddie, once and for all.  He agrees with me, and many others, that action on housing finance reform is the prerogative of Congress, and that after over a decade of conservatorship, it is long overdue.”  (Politico, April 4) 
    • Sen. Crapo and President Trump last week launched separate efforts aimed at reforming the multi-trillion-dollar financial market for single-family and multifamily mortgages, including the GSEs’ Fannie Mae and Freddie Mac.  Chairman Crapo’s  recent housing reform outline proposes to return the GSEs to private control.  (Roundtable Weekly, Feb. 8) 
    • Sen. Crapo will be a featured speaker at next week’s Spring Roundtable Meeting in Washington. 
    • President Trump last week released a presidential memo directing “the Secretary of the Treasury and the Secretary of Housing and Urban Development to craft administrative and legislative options for housing finance reform.”  (Wall Street Journal, March 27) 
    • President Trump also aims to end the GSEs’ conservatorship, “promote competition in the housing finance market … create a system that encourages sustainable homeownership and protects taxpayers against bailouts.”  The memo supports the preservation of the 30-year fixed-rate mortgage. ( White House announcement, March 27) 
    • A coalition of 23 national real estate organizations, including The Real Estate Roundtable, sent a letter supporting Calabria’s confirmation this week to Senate leadership.  (Coalition confirmation support letter, April 1) 

    The Real Estate Roundtable and 27 industry organizations last month submitted principles for reforming the GSEs. (Roundtable Weekly, March 1)