17 Senators Ask FHFA for Rent Increase Restrictions
NAR calls rent caps “putting a Band-Aid on a bleeding artery.” The increase cap could impact about 1 in 4 U.S. units that have Fannie Mae/Freddie Mac-backed mortgages.
WASHINGTON – A coalition of 17 senators sent a letter to the Federal Housing Finance Agency (FHFA) on Monday requesting a way to limit rental increases in apartment units that have mortgages held by Fannie Mae and Freddie Mac – roughly one out of every four U.S. units.
According to the letter, the senators have held multiple hearings on the rent topic, and heard “repeated reports of investors using low-cost financing from Enterprise-backed loans (Fannie Mae and Freddie Mac) to buy properties and then sharply raising rents, mistreating tenants, and allowing buildings to fall into disrepair.”
Among other things, they ask FHFA for “limits against egregious rent hikes in properties with financing backed by Fannie Mae and Freddie Mac, and full, upfront transparency regarding rents and fees that may be charged.”
The National Association of Realtors® (NAR) and other housing organizations strongly disagree with the senators’ proposal.
Bryan Greene, vice president of policy advocacy at NAR, says rent-hike limits would “backfire.” He’s says NAR is very concerned, because, “Measures to cap rents are like putting a Band-Aid on a bleeding artery – they’re not addressing the root cause” of too little supply compared to demand.
Greene also pointed out the downside of rent-increase limitations: “Trying to find a way to have (Fannie Mae and Freddie Mac) restrict rents is just going to drive more housing providers out of the market, especially smaller housing providers like the mom-and-pops that are our members.”
8 tenant protections requested by Senators
- Limiting rent hikes in properties with financing backed by Fannie Mae and Freddie Mac and full, upfront transparency regarding rents and fees that may be charged.
- Requiring good cause for evictions and lease non-renewals – and adopt a strong definition of “good cause,” such as serious and repeated lease violations provable in a court of law.
- Requiring owners to maintain housing that meets or exceeds standards for safety, accessibility and quality, including “prompt and effective remedies when safety or accessibility standards are not met.”
- Comprehensive asset management procedures to ensure housing safety and quality.
- Enforceable protections against discrimination, notably those under the Fair Housing Act, and also discrimination based on source of income, and presumptive exclusion based on information in tenant screening reports, such as a prior eviction or credit score.
- Timely provision of any tenant screening report to applicants upon request.
- Property owner/manager information posted online to help ensure renters have access to their landlords.
- An enforceable right for tenants to organize, which includes forming tenant associations and tenant unions within their buildings and communities.
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