Biden administration unveils renter protections
January 25, 2023
CNN— In response to rent payments soaring across the country in recent years, the Biden administration unveiled new actions Wednesday to protect tenants, make renting more affordable and improve fairness in the rental housing market.
Multiple agencies are expected to take part in improving conditions for renters, taking actions in tandem with a set of principles outlined by the administration focused on renters’ rights.
This blueprint informs further action by the federal government, state and local entities, as well as the private sector, in efforts to strengthen tenant protections and encourage rental affordability.
And it follows some of the most robust federal support for tenants in history, in which the government provided an unprecedented $46 billion in emergency rental funds to struggling tenants impacted by the pandemic.
The agencies involved include the Federal Trade Commission, the Consumer Financial Protection Bureau, the Federal Housing Finance Agency, the Department of Housing and Urban Development and the Department of Justice.
More than a third of the American population — 44 million households — rent their homes. Before the pandemic well over 2 million eviction fillings and roughly 900,000 evictions occurred annually, disproportionately affecting Black women and their children.
During the worst of the pandemic, the federal government’s moratorium on evictions and the historic outflow of rental relief kept at least a million at risk renters housed. But over the last year, rents have spiked and some of the largest corporate landlords have expanded their holdings and increased profits.
Renter-centered actions
The actions outlined on Wednesday target the practices of landlords, rental housing financing and ways to support renters who may be unfairly excluded from renting.
Here’s what some of the agencies will do:
The FTC will examine a range of practices that affect the rental market, including the use of tenant background checks, the use of algorithms in tenant screenings, the provision of adverse action notices by landlords and property management companies, and how an applicant’s source of income factors into housing decisions. It’s the first time the FTC has issued a request for information exploring unfair practices in the rental market.
The CFPB will provide guidance and coordinate enforcement efforts with the FTC to ensure that renters have accurate information in their credit reports and to hold background check companies accountable for their procedures.
The FHFA will initiate a process to examine limits on egregious rent increases and proposals for renter protections for future investments. That’s in addition to the actions announced in November that encourage financing of multifamily loans that guarantee affordable housing.
HUD will propose requiring public housing authorities and owners of rental assistance properties to provide at least 30 days’ advanced notice before terminating a lease due to nonpayment of rent. The DOJ plans to look at anti-competitive information sharing, including in rental markets.
The administration also set out its guiding principles in its “Blueprint for a Renters Bill of Rights,” which, while not enforceable, aims to underscore protections the administration says every renter deserves.
These include access to safe quality, affordable housing; clear and fair leases, and access to eviction prevention and rent relief resources to remain sustainably housed. The blueprint also looks to federal state and local governments to ensure renters know their rights and that they are protected from unlawful discrimination and to protect renters rights to organize.
The announcement on Wednesday also included a call to action for private companies and advocates in the housing industry asking them to strengthen practices and make independent commitments to improve the conditions for renters.
Some participants include Realtor.com, which will make landlords that welcome Housing Choice Vouchers visible on rental searches; and the National Association of Realtors, which will provide property managers with resources on renter-centered best practices like providing information about rental assistance and using alternative credit scores for applicants without a detailed credit history.
The Biden administration has made several announcements addressing housing challenges. Last May, the administration released an housing supply action plan, setting the goal of closing America’s housing supply shortfall in five years. And last summer the government unveiled a plan to reduce housing discrimination.
Neither advocates nor industry satisfied
Housing advocates celebrated the administration’s announcement, despite it falling short of more robust tenant protections they’d like to see.
“Strengthening and enforcing renter protections is vitally important to addressing the broader housing crisis,” said Diane Yentel, president and CEO of the National Low Income Housing Coalition. “There is a tremendous power imbalance in our housing system that tilts heavily in favor of landlords at the expense of low-income and other marginalized renters, putting families at greater risk of housing instability and homelessness and fueling racial inequity.”
Yentel said that while the administration’s announcements are an important step towards achieving President Joe Biden’s commitment to establishing a Renters Bill of Rights, it was a missed opportunity to tie renter protections to landlords getting federally backed loans and other assistance.
“One unfortunate omission from the White House Blueprint is any administrative action to hold corporate landlords accountable for egregious, predatory and often unlawful behavior during and since the pandemic,” said Yentel.
Last year the House Select Subcommittee on the Coronavirus Crisis released findings from a yearlong investigation into the eviction practices of large corporate landlords. The Democrat-led investigation found that some companies engaged in abusive tactics to remove tenants from their homes during the pandemic.
Meanwhile, others in the housing industry say that this kind of federal involvement in housing policy serves to increase housing costs.
“Rental housing policy is heavily regulated at the state and local level,” said Kenny Parcell, president of the National Association of Realtors.”Federally enacted policies can potentially drive housing providers out of the market, which will have an immediate and long-term impact of making rental housing even more competitive and, therefore, more expensive for renters.”
What’s more, he added, “expanding the federal government’s role in rental policy also places an even greater undue burden on mom-and-pop housing providers.”
NAR will participate in an industry challenge set forth by the administration to promote renter-centered practices, but said that rising rents are more a matter of supply and demand.
“Rents are rising, driven by inflation and exacerbated by the housing supply shortage,” said Parcell. “We encourage the administration to look more deeply at how it can address the root causes of rental affordability — namely, affordable housing supply.”
The National Apartment Association, with a network of more over 95,000 members owning and operating more than 11.6 million apartment homes globally, commits to promoting resident programming and practices, such as helping tenants build and improve credit through reporting of positive rent payments to credit bureaus, through their website, industry events and other content channels.
But still, the association expressed frustration with the outcome and resistance to further interventions.
“For months the National Apartment Association worked with the White House in good faith,” said Bob Pinnegar, NAA President and CEO. “We stand by our commitment to promote industry resident services and practices. NAA also made clear the industry’s opposition to expanded federal involvement in the landlord and tenant relationship. Complex housing policy is a state and local issue and the best solutions utilize carrots over sticks.”