News & Research Listing
What offsets remain on the table, what's out and how it affects the rental housing industry.
President Biden on October 28 went to Capitol Hill and released an updated framework for the Administration’s Build Back Better “human infrastructure” plan. After months of negotiations, this new plan has been scaled back by half from its original $3.5 trillion price tag.
Major provisions include expanded child tax credit, universal preschool, investments in elder care and expansions of Pell grants and free school meals. The proposal also includes $550 billion in clean energy and other climate change initiatives including a credit of up to $12,500 for U.S.-made, union-made electric vehicles, incentives for charging stations, the enhancement of existing home energy and efficiency tax credits and the implementation of a rebate program focused on electrification. The program includes funds to address lead in in drinking water, stormwater resiliency and supports resiliency efforts in Environmental Justice communities.
Of interest to our industry, the plan invests $150 billion in affordable housing provisions including investments in rental assistance, housing vouchers and the construction and rehabilitation of an estimated 1 million affordable homes. Click here to access a more detailed list of housing dollars.
The $1.75 trillion plan is offset by tax increases on ordinary income and capital gains income that would impact upper-income Americans. Left out of the package are any changes to like-kind exchanges, increases in the ordinary income tax rates, the general 20 percent capital gains tax rate, the tax treatment of carried interest and the 20 percent pass-through deduction or the taxation of unrealized capital gains at death. A provision in the Ways and Means bill that would have restricted the ability to use IRAs to make certain types of real estate investments is also not included. Interestingly, the proposal does not include any changes to the current-law tax treatment of state and local income taxes. However, this is expected to be addressed as the package moves forward.
As of this writing, it is unclear whether the revised proposal will enable Democrats to cinch the congressional majorities they need to pass reconciliation legislation.
Following the White House’s updated framework, the House Rules Committee released an updated version of the package. Use the drop down features below to review the key tax provisions in play that would impact the multifamily industry.
Individual Income Tax Rates
Although the Framework does not increase the top 37 percent tax bracket, it imposes:
- a 5 percent surtax on taxpayers earning over $10 million in modified adjusted gross income (AGI) (i.e., adjusted gross income less investment interest expense) and an additional 3 percent surtax on taxpayers earning over $25 million in modified AGI.
Notably, there are no changes made to the 20 percent Section 199A pass-through deduction.
In sum, the top marginal income tax rate would rise to 39.04 percent from today’s 29.6 percent when the impact of the net investment income tax (see below) is included in calculations.
Capital Gains Income Tax Rates
Although the Framework does not increase the top 20 percent capital gain tax, it imposes:
- a 5 percent surtax on taxpayers earning over $10 million in modified adjusted gross income (AGI) (i.e., adjusted gross income less investment interest expense) and an additional 3 percent surtax on taxpayers earning over $25 million in modified AGI.
In sum, the top capital gains tax rate would rise to 31.8 percent from today’s 20 percent when the impact of the net investment income tax (see below) is included in calculations.
Net Investment Income Tax
The proposal would expand the current-law 3.8 percent net investment income tax to include net investment income (i.e., capital gains, interest, dividends, annuities, royalties, and rents) earned in the ordinary course of a trade or business by single filers earning over $400,000 and married couples earning over $500,000. It would not apply to any wages on which FICA is currently imposed.
Excess Businesses Losses
The proposal makes permanent a provision limiting excess business losses that was otherwise set to expire at the end of 2026. Under current law, a non-corporate taxpayer is considered to have an excess business loss if their total business deductions exceed business income plus $250,000 for single filers and $500,000 for joint filers. Additionally, while current law allows excess businesses losses to be treated as a net operating loss, the proposal would modify this treatment and not allow losses to offset wages or portfolio income in future years. Losses, however, could be carried forward.
Left out of the Framework are tax increases affecting:
- Like-kind exchanges. NMHC and NAA have long advocated to maintain current-law relative to like-kind exchanges to encourage investors to remain invested in real estate while still allowing them to balance their investments to shift resources to more productive properties, change geographic location, or diversify or consolidate holdings.
- Carried interest. The House Ways and Means Committee’s “human infrastructure” bill would have imposed a three-year holding period on so-called Section 1231 real estate gains.
- Taxation of unrealized capital gains at death. NMHC and NAA support the retention of current-law stepped-up basis rules. Changes to current law could either diminish or discourage the ability of heirs to make improvements to inherited property. Affordable housing inventory could be lost as a result.
- Estate taxes. Notably, NMHC and NAA signed an October 28 letter opposing changes to grantor trusts and valuation rules in the House Ways and Means Committee’s “human infrastructure” bill. That bill proposed to bring grantor trust a decedent owns into that decedent’s taxable estate. Additionally, the bill would have prohibited the use of valuation discounts when non-business assets, including real estate, are transferred.
- Modifications to the types of investments accredited investors may make with IRAs. The House Ways and Means Committee’s “human infrastructure” bill would have restricted the use of IRAs to make certain types of real estate investments.
Low-Income Housing Tax Credit & Rehabilitation Tax Credit
While the House Ways and Means Committee’s version of “human infrastructure” legislation included provisions to expand the Low-Income Housing Tax Credit (LIHTC) and the Rehabilitation Tax Credit, these provisions are not included in the new framework.
We joined an October 25 letter sent by the A Call To Invest in Our Neighborhoods Coalition to President Joseph Biden, Speaker Nancy Pelosi (D-CA), and Senate Majority Leader Charles Schumer (D-NY) asking that final legislation expand LIHTC authority by more than 50 percent. The letter also expresses support for reducing to 25 percent (from 50 percent) the amount of a project that must be financed by tax-exempt private activity bonds in order to access 4 percent LIHTCs. The House Ways and Means Committee-passed reconciliation bill includes these provisions as part of its proposed changes to LIHTC, and it is estimated the bill would provide an additional 1.4 million units.
Energy Tax Incentives
The proposal would modify energy tax incentives available to the multifamily industry. Firms meeting baseline requirements would receive a base credit, but they would have to meet prevailing wages and apprenticeship requirements to receive a bonus credit.
Specifically, firms can quintuple the base credit if they pay all contractors and subcontractors prevailing wages. Projects would also have to be staffed by apprentices (5 percent of labor hours must be performed by apprentices for projects commencing construction in 2022, 10 percent in 2023, and 15 percent thereafter, with a minimum of one apprentice for each contractor or subcontractor employing at least four workers. Exemptions would be permitted if apprentices are unavailable.
Energy Efficient Commercial Buildings Deduction
Beginning in 2022, the base credit for buildings with four or more stories that exceed 25 percent of ASHRAE standards in effect three years before a building is placed into service would be $0.50 per square foot for energy savings. It would increase by $0.02 per square foot for every percentage point by which energy savings exceed the 25 percent baseline threshold, up to $1.00 per square foot. Bonus amounts, as described above, are available for taxpayers meeting applicable labor requirements.
Additionally, taxpayers would be able to take a deduction for energy efficient lighting, HVAC and building envelope costs placed in service as part of a retrofit. The value of the deduction would be based upon how much energy savings is achieved. A minimum 25 percent reduction would be required to realize a $0.50 per square foot gain in the base credit.
The base credit would be increased by $0.02 per square foot for each additional percentage point in energy savings, up to $1.00 per square foot. Bonus amounts, as described above, are available for taxpayers meeting applicable labor requirements. We have long sought a provision to address investment in building energy retrofits that result in significant energy savings relative to building’s own baseline energy performance to be eligible for the credit. The provision would be effective through 2031.
New Energy Efficient Home Credit
The proposal would extend the New Energy Efficient Home Credit (which applies to buildings of three or fewer stories) through 2031. For multifamily units acquired after 2022, a base credit of $500 is provided for units that participate in the ENERGY STAR Multifamily New Construction Program while meeting both national and regional program requirements. It is, however, unclear whether units will decide to participate in this program. A credit of $2,500 per unit is available if the building meets the applicable labor requirements described above. Finally, a base credit of $1,000 is available to multifamily homes certified as zero energy ready under the Department of Energy Zero Energy Ready Home Program
The National Apartment Association is taking legal action to recover damages housing providers suffered under the CDC’s eviction moratorium and ensure that similar measures can never again be enacted.
The National Apartment Association (NAA) on July 27 filed a lawsuit in the U.S. Court of Federal Claims to recover damages on behalf of rental housing providers that have suffered severe economic losses under the U.S. Centers for Disease Control and Prevention’s (CDC) overreaching federal eviction moratorium.
As NAA members and the broader industry understand all too well, the CDC’s prolonged order directly harms those who provide critically needed rental homes, jeopardizes the long-term viability of housing infrastructure and sets a dangerous precedent for future disaster-response measures. NAA is the first to take legal action seeking compensation for the CDC’s policy and to ensure that similar “emergency measures” cannot be enacted again.
The suit, NAA et al. v. The United States of America, is open to all rental housing providers who have been damaged by and are operating in a state or locality under the federal eviction moratorium. It argues that the CDC order has curbed several rights under the U.S. Constitution including: The right to access the courts, the freedom to contract with others absent government interference, the right to demand compensation when property is taken by government action and the limits of federal government power. NAA is confident that the CDC will be found to have acted illegally based on court rulings to date, including the most recent decision from the Sixth Circuit Court of Appeals affirming that the CDC’s order was unlawful.
Apartment owners and operators have continued good-faith operations throughout the public health and economic crises of the COVID-19 pandemic and are now left to shoulder $26.6 billion* in debt not covered by federal rental assistance. As a low-margin industry where just 10 cents of each rental dollar is considered “profit,” this debt is unsustainable and could devastate countless small businesses while simultaneously damaging housing affordability. Though NAA is proud of the unprecedented adaptability and flexibility of our members and the broader industry, we firmly believe that it is time to make rental housing providers and their residents whole again.
Relief efforts to date have fallen short of fully supporting the rental housing industry and its residents. While the federal government has allocated roughly $47 billion in federal rent relief, it took more than nine months for Congress to do so. Further, that amount also does not cover the full and continuously growing amount of rent debt – current estimates indicate an additional $26.6 billion on top of Congress’ $47 billion rental assistance funding. The government’s prolonged inaction, paired with a sluggish rollout and the CDC eviction moratorium, has only allowed unfunded rent debt to continue to balloon.
Since the onset of the pandemic, NAA has aggressively advocated to protect the interests of the rental housing industry. We have called out the dangers and short-sightedness of eviction moratoria and asked for its sunset to both the 116th and 117th Congresses, in meetings with both the recent and current White House administrations and across all levels of media. NAA was among the first to take legal action challenging the CDC’s authority last September by joining the National Civil Liberties Alliance lawsuit, Richard Lee Brown, et al. v. Secretary Alex Azar, et al.
The COVID-19 pandemic was devastating, and if we do not act, the housing affordability crisis may grow into a catastrophe where the government could invoke more “emergency” remedies. With the meter on rent debt still running, political will waning and Congress moving past COVID-relief measures, NAA is putting up the greatest fight yet and asking the courts for two things: Fair compensation for damages suffered under the unlawful CDC order and an assurance that the federal government can never do this again.
NAA is proud to take action for our members and work to stabilize the industry. The rental housing industry cannot be held solely responsible for an unfunded rent debt while the federal government trades one crisis for another. Ultimately, making housing providers and their residents whole again will help secure the long-term health of the rental housing industry and ensures households across the income spectrum have continued access to rental housing.
*$57.3 billion in rent debt at the end of 2020 (Urban Institute) + $8 billion in Q1 2021 (MBA) + estimated $8 billion in Q2 2021 (MBA, Q2 numbers expected soon) - just under $47 billion in allocated rental assistance = $26.6 billion in unfunded rent debt (and climbing)
A new federal ruling has voided the CDC’s Eviction Order; a stay of the decision has been issued until the appeal is heard.
On May 5, a federal judge from the U.S. District Court for the District of Columbia issued a ruling voiding the U.S. Centers for Disease Control and Prevention’s (CDC) eviction moratorium order. Though the U.S. government quickly appealed the case, this ruling is another significant addition to the foundation created by the National Apartment Association’s (NAA’s) ongoing legal challenges to the CDC eviction moratorium.
Unlike previous legal efforts, this court specifically vacated the CDC order in its entirety despite the Department of Justice (DOJ) urging courts to limit the decision to parties in the case. The Judge in this case rejected that request and set the entire order aside.
In response, the government swiftly filed its appeal to the D.C. Circuit, where a three-judge panel will decide the issue. The same judge quickly granted the government’s request for a temporary administrative stay – this means that, practically speaking, the moratorium will remain in effect until the government’s appeal is ultimately decided. The stay gives the Court time to consider the merits of the DOJ’s appeal and the plaintiffs time to file any opposition to DOJ’s motion for stay. The matter will play out in the courts during the next several weeks, and it is important to remember that the CDC eviction order remains in effect until the D.C. Circuit issues its ruling.
NAA released a statement to the press on this matter and will continue to keep members apprised of updates to this case, as well as the other legal challenges to the CDC order. We understand the frustration and disappointment, but every decision in our favor is a positive step forward.
A new rule will require “debt collectors” to provide renters written notice of their rights under the CDC Eviction Order.
On April 19, the Consumer Financial Protection Bureau (CFPB) issued an interim final rule requiring “debt collectors” to provide written notice to renters of their rights under the CDC’s eviction moratorium order and prohibiting "debt collectors" from misrepresenting renters’ eligibility for protection from eviction under the moratorium. The rule will go into effect on May 3 and last through the duration of the CDC Order, which was recently extended through June 30, 2021.
To understand the rule’s applicability, it is important to note the CFPB’s definition of “debt collector,” derived from the Fair Debt Collection Practices Act (FDCPA). According to the CFPB, under the FDCPA:
[The interim final rule requirement] may include lawyers who represent landlords or property managers in eviction court to collect unpaid rent, if they start collecting the debt for [a renter’s] landlord after [renters] fall behind on [their] payments.
Further, there may be other considerations, including relevant case law that may be more conclusive about whether property managers or management firms are categorized as “debt collectors,” and whether state eviction laws and court processes separate the process to recover possession from actions to cover outstanding rent debt.
The National Apartment Association (NAA) encourages members to seek the advice of a local attorney before proceeding with an eviction to understand whether CFPB’s rule applies.
The CFPB’s rule is an unfortunate expansion of the CDC’s Order, and NAA remains in conversation with the Administration and federal agency officials about the ongoing challenges that rental housing providers face while the CDC Order and related federal requirements remain in place. In addition to being bad public policy, these efforts make compliance difficult in an area where there is already an abundance and patchwork of legal requirements complicating the CDC’s Order. This interim final ruling only adds to the confusion as federal, state and local eviction moratoria are being applied very differently in courts across the country.
It is time to end federal efforts that interfere with the eviction process. NAA will continue combating these policies and shift focus to the distribution of the almost $50 billion of federal rental assistance.
The Wall Street Journal Editorial Board has condemned the recent passing of rent control in St. Paul, Minn.
Voters in St. Paul, Minn., passed a rent control ballot initiative in early November with 53% of voters in favor of the 3% cap increase per year. The Wall Street Journal Editorial Board has condemned the rent control approval in St. Paul in its article, “Rent Control Backfires Again in St. Paul.”
The Editorial Board cites the St. Paul Pioneer Press, which reported developers are pulling out of projects, while another lost an investor.
“If a city’s housing supply can’t grow to meet demand, the natural result is that prices go up,” states the Editorial Board. “Artificial caps then produce shortages and other distortions, such as dilapidated properties that landlords don’t have an incentive to renovate.”
Click here for more on the recent passing of rent regulation in Minneapolis and St. Paul and how NAA continues to aggressively oppose all forms of rent control through its robust grassroots and advocacy endeavors.
There’s a new rate setting methodology for flood insurance. Here’s what it means for the industry.
On October 26, 2021, National Flood Insurance Program (NFIP) Senior Executive David Maurstad and Chief of Catastrophic Modeling Andy Neal spoke to National Apartment Association (NAA) members about the NFIP’s new rate setting methodology, Risk Rating 2.0.
Unlike the NFIP’s previous rate setting procedures, Risk Rating 2.0 takes into account the individual characteristics of a property and its overall flood risk. Implemented on October 1, 2021, for new policyholders and April 1, 2022, for existing policyholders, Risk Rating 2.0 largely eliminates the use of flood maps to determine rate setting, instead weighing a building’s actual risk against a variety of flood types, the structure’s mitigative features, distance to a water source and more.
Mr. Maurstad began the presentation by explaining why Risk Rating 2.0 was crucial to the long-term success of the NFIP. The program’s legacy rate setting system had created “long standing inequities that we could no longer ignore,” said Mr. Maurstad, referring to the decades old practice of setting premiums by federally mapped flood zone. This methodology had resulted in lower value properties paying higher premiums because of their location, effectively subsidizing rates for higher value properties in lower risk flood zones.
Data made available prior to Risk Rating 2.0’s implementation did not adequately provide multifamily policyholders with an understanding of how their premiums may change. Later in the presentation, Mr. Neal addressed the cloudiness of the data.
“Many communities will break both ways [experiencing increases and decreases]. It’s the nature of Risk Rating 2.0 to rate a structure on an individual basis. Even some very high value buildings have ended up with low premiums once you take into account the level of risk actually they face,” said Mr. Neal. “The most important way for you to understand what this means for you is to go and speak with an [insurance] agent and get your quote.”
NAA will continue to work closely with the NFIP to address member concerns and questions surrounding the implementation of Risk Rating 2.0. NAA will also continue to monitor the reauthorization of the NFIP. The NFIP remains an essential tool for multifamily owners and operators to help mitigate flood-based risk. With more than 5 million policyholders participating in the program, long-term reauthorization of the NFIP is critical to ensuring the health of our nation’s housing supply and safety of its community members.
To learn more about our advocacy on the National Flood Insurance Program, please reach out to Sam Gilboard, NAA’s Senior Manager of Public Policy.
A recent decision in Pennsylvania emphasizes the opportunity to improve Section 8.
In an unprecedented victory, the Pennsylvania Supreme Court (the Court) struck down the City of Pittsburgh’s source of income ordinance in a unanimous decision. Much like similar fair housing laws in states and localities across the country, Pittsburgh’s ordinance prevented housing discrimination based on one’s status as a voucher holder, much like protections from racial or religious discrimination. Ultimately, this would have mandated owner and operator participation in the Section 8 Housing Choice Voucher (HCV) Program.
The Apartment Association of Metropolitan Pittsburgh v. the City of Pittsburgh decision culminates a six-year legal battle. In this case, the state’s highest court affirmed lower courts’ rulings which found the City did not have the statutory authority to enact this ordinance. In its defense, the City of Pittsburgh argued that it was empowered to prohibit discrimination based on source of income because the state’s Home Rule Charter (HRC) allows a municipality to exercise “any power or perform any function not denied by [the Constitution or state statute].”
However, the Court disagreed, holding that the HRC’s Business Exclusion precludes Pittsburgh’s source of income ordinance as the Business Exclusion prohibits a municipality from determining the “duties, responsibilities, or requirements placed upon businesses, occupations and employers…” The Court further expands in their decision that “[n]othing in [state statute] permits the City to enact legislation requiring residential landlords to participate in an otherwise voluntary federal housing subsidy program.” We agree that the HCV program was intended to be voluntary.
Andre Del Valle, Director of Government Affairs of the Pennsylvania Apartment Association (PAA), writes:
PAA and its members are grateful for the Pennsylvania’s Supreme Court’s intervention and diligent review of the source of income legislation, which allowed the court to reach its final decision, affirming what landlords and multiple lower court decisions have stated for years, that Pittsburgh exceeded its authority in enacting this ordinance.
While our members are grateful to put this litigation and legislation behind us, we look forward to working together with the City of Pittsburgh, its officials, and appropriate agencies, on future endeavors in a cross collaborative manner.
Given that the Court in this case referred to the HCV program as a “complex web of administrative obligations unwilling landlords must accept to satisfy the Ordinance…”, it should come as no surprise that a study funded by U.S. Department of Housing and Urban Development (HUD) found that 68 percent of housing providers who refuse voucher holders had, in fact, accepted them previously.
The HCV program’s requirements can create uncertainty in rental housing operations and undermine the ability of owners to properly manage risk. These challenges lead existing housing provider participants to leave the program and deters new participants from opting in. The Choice in Affordable Housing Act is the right approach to address the program’s challenges and incentivize voluntary participation in the program as Congress intended.
The National Apartment Association (NAA) continues to work with our affiliate network to oppose efforts that make voucher acceptance mandatory and engage with federal policymakers to offer solutions that increase positive outcomes for both participating housing providers and renters alike.
Currently, 19 states, more than 100 localities and the District of Columbia have source of income laws on the books. To learn more about source of income protections or the HCV program, please contact Ben Harrold, NAA’s Manager of Public Policy.
Two notably different approaches to rent control were approved by voters in St. Paul and Minneapolis.
On November 2, 2021, Minneapolis and St. Paul, Minnesota voters narrowly approved rent control in two unprecedented ballot initiatives. In Minneapolis, the passage of Question 3 enables the City Council to set rent regulation policies while St. Paul voters’ approval of Question 1 will institute a strict rent stabilization ordinance capping rent increases to 3 percent annually with limited exceptions.
While limits on rent increases could sound like an effective way to promote long-term affordability in a region, the reality is just the opposite. The overwhelming majority of economists agree that regulating rent prices will exacerbate housing affordability shortages, decrease the quality of existing units and hurt the regional economy.
The National Apartment Association (NAA) is disappointed with the outcome of these ballot initiatives given the likely consequences on the Twin Cities’ renters, housing providers and the broader housing industry. We commend the Minnesota Multi Housing Association for their tireless effort in advocating against these harmful ballot questions and look forward to working with them further, especially in Minneapolis where ultimate action on rent control will be decided by the City Council.
NAA continues to aggressively oppose all forms of rent control through robust grassroots and advocacy endeavors. To learn more about rent regulation policy, please contact Ben Harrold, NAA’s Manager of Public Policy.
On October 7, 2021, the U.S. Department of Housing and Urban Development (HUD) published an interim rule that requires HUD-subsidized public housing and housing providers whose properties benefit from project-based rental assistance to provide their residents with a 30-day notice that includes information about available federal emergency rental assistance (ERA) prior to filing for eviction due to nonpayment of rent.
As the National Apartment Association (NAA) previously reported, this news is consistent with HUD’s interpretation of the CARES Act notice to vacate requirement and the agency’s public statements signaling their intention to make this a permanent mandate beyond the COVID-19 national emergency.
Here’s what you need to know about the new rule:
- Published as an interim final rule, this rule will became effective on November 8. It is intended to gives residents an opportunity to secure federal funding that is available due to a Presidential declaration of a national emergency.
- The rule provides the HUD Secretary with the discretion to require covered housing providers to provide adequate notice (at least 30 days) to their residents prior to filing for eviction due to nonpayment of rent. The notice must include information about available federal ERA funding.
- In terms of the notice to residents, owners must, at a minimum, use HUD-provided language, updated to reflect the entity issuing the notification with a link to the appropriate local ERA grantee and their contact information. See the Appendix: Information for Tenants in HUD's October 7 notice.
- The authority granted by this rule extends to future national emergency declarations and is not limited to the COVID-19 pandemic.
- The new rule applies to HUD-subsidized public housing and housing providers that participate in HUD’s project-based rental assistance (PBRA) programs.
- Included in the scope of this rule are participants in HUD's PBRA programs such as Section 8, Section 8 Moderate Rehabilitation, Section 202/162 Project Assistance Contract, Section 202 Project Rental Assistance Contract (PRAC), Section 811 PRAC, Section 236 Rental Housing Assistance Program and Rent Supplement.
- The rule does not cover Section 8 Housing Choice Voucher participants.
Regardless of this rule, remember housing providers of federally backed and federally assisted properties must provide covered renters with a 30-day notice to vacate in accordance with the CARES Act. Unless and until a clear sunset date is codified into law, HUD and other federal agencies will continue to enforce their interpretation of the CARES Act’s 30-day notice to vacate requirement. As background on HUD’s interpretation of this requirement, see HUD’s Office of Multifamily Housing Programs guidance, Question 25 and Office of Public and Indian Housing guidance, EM1 on page 10.
This announcement is part of the Administration’s “whole of government” approach to reduce preventable evictions and provide renters more time to access the $46.5 billion in federal ERA dollars that is gradually being distributed to renters and housing providers through state and local programs.
To learn more about this rule or NAA’s federal regulatory advocacy, contact Nicole Upano, NAA’s Director of Public Policy.
NAA’s Legal Counsel John McDermott tackles frequently asked questions about our newest legal endeavor.
Q: Let’s assume I’m an eligible property owner. Why is it crucial for me to join the lawsuit? In other words if others join the lawsuit why do I need to?
A: First and foremost, let me be clear. Property owners must participate in the lawsuit to have access to any dollars awarded through this endeavor. Our estimates show that $26.6 billion in rent debt exists without any federal assistance allocated to cover it. This lawsuit is the only feasible way to reclaim that lost rent, and property owners who do not join the lawsuit will not have access to dollars that may be awarded.
Ultimately, though, the goal of this lawsuit goes beyond just money. The federal government broke an efficient system and left housing providers with tens of billions of dollars in debt through their nationwide eviction moratorium. A good way to look at it is “you broke it, you buy it” – meaning the government must pay for their unfunded and overreaching mandate. And, equally important, this lawsuit will ensure that the federal government cannot take measures like this again. Though the U.S. Supreme Court struck down the CDC eviction order, they left open the possibility for another moratorium to come through Congressional action; this lawsuit could prevent that from happening. It’s crucial for any eligible housing provider to participate so that together, as one voice, we can secure property rights and protect the future of our industry.
Q: How much time and legwork is involved in joining the lawsuit?
A: NAA and our legal representation have worked to streamline the plaintiff sign on process. It is our goal to ensure interested parties provide sufficient information to confirm their eligibility and ultimately save everybody time. Initially, property owners will need to complete a brief client information sheet and portfolio description. These documents are a snapshot of your rental properties and ask simple questions about your portfolio that will help ensure your eligibility. Questions include: states in which you have properties, unit counts and amount of uncollected rent, among others. Interested parties will also need to sign a contingency fee agreement and upload a W-9.
The process is thorough yet streamlined, as this lawsuit could secure property rights for years to come and result in payment of rent lost under the CDC’s eviction order.
Q: My portfolio didn’t experience large monetary losses, why should I join?
A: Ultimately this is about protecting your business and ensuring that you, alongside the broader rental housing industry, are not at the mercy of the government’s next “emergency order.” A victory in this case has the potential to prevent a federal takeover of private property from happening again.
Further, NAA wants to stop the federal government from damaging rental housing again by making it pay for the damage it caused over the last year. If they realize that they will have to pay for bad policies, they might think twice before damaging rental housing again. The industry’s future depends on property owners’ participation— even if your company experienced limited losses. We have a favorable Supreme Court that has already ruled recently to protect property rights, which provides us with a paramount opportunity.
Q: Is there a deadline to sign up?
The trial court is expected to reach a decision in the first quarter of 2022. Only those companies that have joined the case prior to that ruling will have their claims included as the case moves through the appeals process. The lawyers will amend the complaints filed with the court to add plaintiffs as they join but will be unable to do so when the case is on appeal.