Thirty-five percent of Americans—44 million households—rent their homes. In recent years—in the face of the COVID pandemic and unprecedented demand, rents have risen considerably. From 2017 to 2022, the average year-over-year increase in rent was 5.77% nationwide, with the biggest increase occurring from 2021 to 2022 at 14.07%.
In late January, 2023, the Biden Administration released Blueprint for a Renters Bill of Rights, outlining a path to alleviate a constricted rental housing market and support tenants. The blueprint contains five provisions:
- Safe, Quality, Accessible, and Affordable Housing: Renters should have access to housing that is safe, decent, and affordable.
- Clear and Fair Leases: Renters should have a clear and fair lease that has defined rental terms, rights, and responsibilities.
- Education, Enforcement, and Enhancement of Renter Rights: Federal, state, and local governments should do all they can to ensure renters know their rights and protect them from unlawful discrimination and exclusion.
- The Right to Organize: Renters should have the freedom to organize without obstruction or harassment from their housing provider or property manager.
- Eviction Prevention, Diversion, and Relief: Renters should be able to access resources that help them avoid eviction, ensure the legal process during an eviction proceeding is fair, and avoid future housing instability.
The Need for A Renters Bill of Rights
“Renters with the lowest incomes across the nation are in crisis,” said National Low Income Housing Coalition (NLIHC) President and CEO Diane Yentel in a statement issued on January 25. “Even before the pandemic, 10 million extremely low-income households were struggling to keep roofs over their heads, always one financial shock away from falling behind on rent and being threatened with eviction and, in the worst cases, homelessness.
“During the pandemic,” she continued, “the Biden-Harris administration and Congress took historic action to provide unprecedented resources and protections to keep millions of renters stably housed. Today, as emergency resources are depleted, and protections expire, these same households are again facing urgent challenges.”nnThe Federal Trade Commission (FTC), Consumer Financial Protection Bureau (CFPB), Federal Housing Finance Agency (FHFA), U.S. Department of Justice, and the U.S. Department of Housing and Urban Development have all been tasked with undertaking actions to support the blueprint.
A “Call to Action”
The Administration, concurrently with the blueprint, announced a “call to action” to housing providers and other stakeholders to strengthen practices and make their own independent commitments that improve the quality of life for renters, which is called the Resident-Centered Housing Challenge. Thus far, the Administration reports, several housing providers and agencies have made commitments to these principles.
The Wisconsin Housing and Economic Development Authority (WHEDA) and Pennsylvania Housing Finance Agency (PHFA) have capped annual rental increases to 5 percent per year for federally or state-subsidized affordable housing.
Members of the Stewards of Affordable Housing for the Future (SAHF), which collectively own or manage 145,000 housing units across the U.S., have committed to offer flexible payment plans for residents with unpaid rent who have engaged with property management and to provide the following notices and protections where permitted by local law and financing documents: at least 30 days’ notice to vacate for nonpayment of rent; at least five days to cure a missed rent payment; and 60 days’ notice to tenants of any proposed sale or closure of a property.
A Need for More Rental Assistance
nDuring the COVID pandemic, emergency rental vouchers became a vital tool in preventing evictions and ensuring that families did not fall behind on their rent. In Texas, for instance, the emergency rental assistance program was widely used as a part of legal mediation. Texas introduced the Texas Eviction Diversion Program (TEDP) in February 2021. A collaboration among the Texas Department of Housing and Community Affairs (TDHCA), the Office of the Texas Governor, the Supreme Court of Texas, and the Texas Office of Court Administration collaborated to create TEDP.
Through TEDP, TDHCA reserved 10% of available Texas Rent Relief funds to help low-income tenants facing eviction to remain in their homes and provide landlords with an alternative to eviction. Both the tenant and the landlord had to agree to participate and meet the program requirements. Lump sum payments were made to landlords in exchange for allowing tenants to remain in their homes, and diverted cases were dismissed and made confidential from public disclosure. By December 2022, 99% of the program’s funds had been used.
Realtor.com Rentals plans to pilot a new listing process through their DIY landlord product, Avail, highlighting units and landlords that indicate that they welcome Housing Choice Vouchers. Additionally, more and more states are passing “source of income” laws that consider refusal to accept vouchers a form of discrimination. According to the blueprint, the American Rescue Plan Act of 2021 provided over $33 billion to assist renters and housing providers with emergency rental assistance, emergency housing vouchers, subsidies for new housing supply, and resources for fair housing and legal counsel. In fiscal year 2022 and fiscal year 2023, the President’s Budget proposed the largest expansion of the Housing Choice Voucher program in decades as a downpayment toward ensuring every extremely low-income household can access affordable housing.
The Administration is also taking steps to prevent discrimination against renters who use vouchers. Discrimination against a holder of a Housing Choice Voucher is banned in the federal Low-Income Housing Tax Credit (LIHTC) program, which is the largest affordable housing production program in the country. Discrimination based on a person’s source of income is not expressly prohibited under the Fair Housing Act, the blueprint points out, adding that there are several ongoing agency actions that will be enhanced, consistent with agency authorities, to reduce such discrimination going forward. Consistent with existing LIHTC rules, the Treasury Department reiterates that LIHTC building owners should lease units in a manner consistent with HUD’s.
New “Resident-Centered” Best Practices
The National Apartment Association commits to promoting resident programming and practices, such as helping tenants build and improve credit through reporting positive rent payments to credit bureaus. The National Association of Realtors and its affiliate, the Institute of Real Estate Management, commit to creating new resources for property managers in their network of 1.5 million members that highlight ways they can incorporate resident-centered property management practices in their businesses. Practices would include a range of examples that have proven effective, such as advertising to prospective residents that Housing Choice Vouchers are accepted at their property, providing information about rental assistance, and using alternative credit scores for applicants without a detailed credit history.
And the National Multifamily Housing Council commits to working with its 2,000 members to identify business standards that align with principles of resident-centered management practices, such as helping residents build credit, providing resource information to residents in financial distress, and communicating these practices through a new resource hub on its website.
A Different Approach?
While Yentel and the NLIHC are encouraged by these steps, other industry members are less enthusiastic.
The National Association of Home Builders’ Chairman Jerry Konter said in a statement that he and his organization believe that the rental crisis would be better addressed by providing builders with more resources, allowing for the construction of more housing units.
“While not as bad as it could have been, the White House rental executive action is the wrong strategy, centering on rental protections instead of market-based solutions that will truly ease the nation’s housing and rental affordability crisis by spurring the production of badly needed affordable housing,” he said. “Strengthening successful programs like the Low-Income Housing Tax Credit is the right way to proceed if we are to bring down rising home and rental prices.
“If the administration is truly committed to helping America’s renters,” Kantor continued,” it will champion solutions that will enable builders to construct more apartments and homes to reduce the nation’s deficit of 1.5 million housing units.”
