Tag: Housing

Roundtable Recommends Congressional Focus on Emergency Rental Assistance for Residential, Business Tenants Impacted by Covid-19

Posted on by Trey Jackson

Skyline Philadelphia

The Real Estate Roundtable on June 8 urged Congress to develop a policy solution that assists residential and business tenants, economically harmed by the pandemic, with meeting their due and owing rent obligations.  The letter sent was submitted for the record of a June 10 virtual hearing on “The Rent is Still Due: America’s Renters, COVID-19, and an Unprecedented Eviction Crisis” by the House Financial Services Subcommittee on Housing, Community Development. 

  • The Roundtable emphasizes in the letter that a specific rent assistance program for both residential and business tenants is needed to:
    • Keep workers housed and employed;
    • Maintain property taxes for state and local budgets that pay for essential community services;
    • Safeguard Americans’ retirement savings; and
    • Avoid a cascade of mortgage foreclosures.
  • The letter explains that tenants’ rental revenues are the foundational link in an “obligation chain” that supports local government property taxes to pay for essential community services, provides the revenue to pay the salaries and benefits of real estate industry workers, maintains the stability of the mortgage system, and supports Americans’ pension and retirement savings.  
  • Articles and studies cited in an attachment to the letter describe drastic declines in rent collections since April, especially from businesses in the retail and hospitality sectors.  A cited article published in the Washington Post on June 3 – “The next big problem for the economy: Businesses can’t pay their rent” – reports:
    • “The problem for the broader U.S. economy is that when businesses … stop paying rent, it sets off an alarming chain reaction. Landlords are now at risk of bankruptcy, too. Commercial real estate prices are falling. Jobs at property management companies and landscapers face cuts. Banks and private investors are unwilling to lend to most commercial real estate projects anymore, and cash-strapped city and local governments are realizing the property taxes they usually rely on from business properties are unlikely to be paid this summer and fall”
  • Additionally, the letter cites CoStar Risk Analytics, which reports the commercial real estate market can expect to see borrowers default on more than 13,000 loans totaling $148 billion in value.
  • The depressed state of business rent collections is a foreboding sign of diminishing commercial real estate asset values, which translates to lower property tax revenues for state and local governments to pay for infrastructure and essential health care and first-responder services. 
  • The letter’s proposes that “Congress should strengthen the ‘obligation chain’ with a robust rental assistance program specifically designed to help business and residential tenants through the current crisis.”  General assistance criteria for business and residential tenants to qualify for emergency rent support are suggested in The Roundtable’s June 8 letter.
  • The House subcommittee also heard from a coalition of national housing associations that submitted a letter focusing on the need for a residential rent assistance program.  “It is a top priority for the rental housing industry that Congress establish an emergency rental assistance program,” the groups wrote in their June 9 letter.  “We expect a significant number of residents will continue to be negatively affected by the pandemic, inhibiting their ability to pay their rent, even with the assistance provided in the CARES Act.”    

The need for policies to preserve the “rental obligation chain” and sustain economic recovery from the fallout of Covid-19 was a central topic during The Roundtable’s June 11-12 Virtual Annual Meeting.

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House of Representatives Passes Affordable Housing Bill to Reduce Zoning Barriers with No Opposition

Posted on by Trey Jackson

The United States House of Representatives on Monday passed the bipartisan Yes in My Backyard (YIMBY) Act (H.R. 4351) on a voice vote, following last week’s unanimous approval by the House Financial Services Committee.  (Roundtable Weekly, Feb. 28, 2020)

  • Sponsored by Reps. Denny Heck (D-WA) and Trey Hollingsworth (R-IN), the YIMBY Act avoids a mandate from Congress to compel cities and towns to enact certain land use laws.  Municipalities that receive HUD’s Community Development Block Grants (CDBG) would be discouraged from limiting housing supplies through reporting on and disclosing their land use and zoning policies that inhibit high density land uses. 
  • The YIMBY Act would direct a community receiving federal CDBG money to consider, track, and report on implementation of over 20 pro-housing strategies, such as:
    • Enacting high-density zoning, and expanding by-right multifamily zoned areas;
    • Allowing manufactured homes and accessory dwelling units on single-family lots;
    • Reducing minimum lot sizes;
    • Increasing allowable floor area ratios for multifamily projects;
    • Providing property tax abatements to existing home owners to garner support for high development densities in their communities; and
    • Ensuring that impact fees paid by developers accurately reflect infrastructure needs generated by new units.
  • “Sunlight is the best disinfectant and we need to identify and reduce barriers to housing construction at the local level,” Heck said following the House vote. “I am proud that Congress is taking a critical first step towards bringing relief to cost-burdened renters and homeowners across America.”  (Heck press release, March 2.)
  • “We want more affordable homes for American families,” Hollinsgworth said on Monday.  The YIMBY Act’s unanimous approval “signals strong support across the aisle to reform our nation’s housing regulations at all levels of government.” (Hollingsworth Press Release, March 2)
  • The Roundtable joined Feb. 24 and March 2 coalition letters signed by real estate, “smart growth” and subsidized housing advocates, in a show of wide stakeholder support for the YIMBY Act.
  • The Roundtable also urged support for the YIMBY Act in comments filed with HUD in January.  (Roundtable Weekly, Jan. 17, 2020). Companion legislation is pending in the Senate (S. 1919), sponsored by Todd Young (R-IN) and Brian Schatz (D-HI).  The bill also reflects the goals of President Trump’s Executive Order for “Eliminating Regulatory Barriers to Affordable Housing.” (Roundtable Weekly, June 28, 2019)
  • Speaking at the 2020 Pension Real Estate Association Spring Conference this week Roundtable President and CEO Jeffrey D. DeBoer, said: “The Roundtable has long recognized that safe, decent, and affordable housing is essential to the well-being of America’s families, communities and businesses. The YIMBY Act is a positive first step in eliminating discriminatory land use polices and removing barriers that prevent much needed affordable housing from being built throughout the country.”

The Roundtable and coalition partners will continue to urge lawmakers to make progress on the YIMBY Act in the Senate and similar legislation that eases burdensome rules that inhibit affordable housing development.

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House Committee Unanimously Advances Bill to Reduce Zoning Barriers to Affordable Housing

Posted on by Trey Jackson
  • The Real Estate Roundtable joined a Feb. 24 coalition letter to support H.R. 4531, the Yes in My Backyard (“YIMBY”) Act. The bipartisan bill – sponsored by Reps. Denny Heck (D-WA) and Trey Hollingsworth (R-IN) – would direct local governments that receive HUD Community Development Block Grants (“CDBGs”) to develop favorable planning and zoning strategies that enable affordable housing development.
  • “We have a national housing crisis, one that is brought on in part by zoning and land use policies,” Rep. Heck said upon the Committee’s approval of the bill today with no opposition.  “The YIMBY Act is a crucial first step to addressing these policies in order to increase affordability and construction.”  (Heck-Hollingsworth joint press release)
  • The YIMBY Act respects federalism principles and avoids a mandate from Congress to compel cities and towns to enact certain land-use laws.  Rather, the bill aims to discourage localities from limiting housing supplies through reporting and disclosure rules attendant to HUD’s grant process.
  • Specifically, the YIMBY Act directs that a community receiving CDBG money must consider and track implementation of over 20 pro-housing strategies, such as:
  • Enacting high-density zoning, and expanding by-right multifamily zoned areas;
  • Allowing manufactured homes and accessory dwelling units on single-family lots;
  • Reducing minimum lot sizes;
  • Increasing allowable floor area ratios for multifamily projects;
  • Providing property tax abatements to existing home owners to garner support for high development densities in their communities; and
  • Ensuring that impact fees paid by developers accurately reflect infrastructure needs generated by new units.
  • Speaking at the Annual Real Estate Forum held at the University of Colorado (Boulder) this week, Roundtable President and CEO, Jeffrey D. DeBoer, said:  “The YIMBY Act recognizes that local zoning ordinances coupled with lengthy duplicative permitting hurdles frequently result in decreased housing availability and increased housing costs.  Asking local authorities to report on their efforts to ease these regulatory hurdles makes a lot of sense.”  DeBoer and Roundtable board member Ric Clark (Senior Managing Partner and Chairman, Brookfield Property Group) focused their keynote presentation at the event on national policy issues, including housing affordability, as well as current and expected trends in national real estate markets.
  • The Roundtable urged support for the YIMBY Act in comments filed with HUD in January.  (Roundtable Weekly, Jan. 17, 2020). Companion legislation is pending in the Senate (S. 1919), sponsored by Todd Young (R-IN) and Brian Schatz (D-HI).  The bill also reflects the goals of President Trump’s Executive Order for “ Eliminating Regulatory Barriers to Affordable Housing.” (Roundtable Weekly, June 28, 2019)
  • The National Multifamily Housing Council (NMHC) and National Apartment Association (NAA) issued a statement praising the Committee’s action on the YIMBY Act – and also noted the successful markup of the Housing is Infrastructure Act (H.R. 5187), sponsored by Chairwoman Maxine Waters (D-CA).  H.R. 5187 would direct greater investments to construct new affordable housing units for low-income households, persons with disabilities, and the elderly.  It would also provide more federal funding to build, repair and modernize public housing.
  • A bill similar to the YIMBY Act — that uses the “carrot” of federal grants to incentivize high density land uses – is the Build More Housing Near Transit Act (H.R. 4307).  While the YIMBY Act leverages HUD CDBG dollars, H.R. 4307 leverages Federal Transit Administration grants to require local authorities to evaluate housing development along proposed rail, bus, and other mass transit routes.  H.R. 4307 is under consideration as part of “must pass” infrastructure legislation to reauthorize the Highway Trust Fund, which is scheduled to expire on Sept 30. (Roundtable Weekly, Oct. 4, 2019)

The strong bipartisan showing for the YIMBY Act at the Committee level bodes well for full House consideration in the coming weeks.  While the path forward in the Senate is presently unclear, The Roundtable and coalition partners will continue to press lawmakers to make progress on the YIMBY Act and similar legislation.

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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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