Housing Takes the National Stage
Standing out amongst the myriad of candidates in the 2020 Presidential race is driving presidential hopefuls to embrace bold tactics to remain relevant as policy discussions heat up. The Democratic field has embraced three key policy areas — infrastructure, climate and social equality — and it is under these marquee issues that candidates have begun to discuss national housing strategy. Some positive proposals have been released; however, to this point few candidates have specifically acknowledged what must be a central part of addressing the nation’s housing needs: increasing the supply of rental housing.
As we wait for more nuanced housing plans to emerge, the National Apartment Association (NAA) is paying close attention to these issues as we measure their impact on the apartment industry. Read on for a digest of what the candidates have proposed, so far.
Cory Booker, Steve Bullock, Julian Castro, John Delaney, Bernie Sanders and Elizabeth Warren propose increased funding for the National Housing Trust Fund (NHTF). NAA supports expansion of the NHTF and its efforts to construct or preserve housing for very low and extremely low-income Americans; too often, affordable housing development is stalled due to lack of financing. NHTF allocations offer grantees vital gap financing, which gives affordable housing projects the necessary capital to leverage additional funding and continue development. Consequently, candidates understand that there are often more barriers to the construction of new homes than there are bridges.
Joe Biden, Booker, Castro, Delaney, Warren and Andrew Yang will incentivize municipalities to scale back policies that hinder the development of new affordable housing and increasing supply. These include eliminating parking space minimums, impact fees and zoning restrictions that dramatically increase the cost of construction. NAA’s U.S. Barriers to Apartment Construction Index found that complex local regulation severely restricts new housing development, further exacerbating the affordable housing gap in some of America’s major metro markets. It is important that candidates who are discussing housing policy and infrastructure continue to support the mechanisms that fuel new construction, while simultaneously discouraging those which exclude, hinder and deter.
Candidates have also made climate and energy policy a centerpiece of their campaigns, taking special aim at the carbon footprints of America’s building stock. Biden would like to see a 50 percent reduction in carbon emissions from all buildings by 2035, while Beto O’Rourke campaigns for 50 percent net-zero emissions nationwide by 2030. Pete Buttigieg and Sanders promise to build a 100 percent clean energy America. Castro will establish a $200 billion green infrastructure fund. Tom Steyer describes a $2 trillion effort to curb global warming by 2045. Amy Klobuchar, Booker and Bullock all call for deep energy efficient retrofits of America’s existing housing stock. On their face, the proposals portend herculean efforts that will require massive participation from the building industry to even come close to achieving the goals set out. This will result in higher housing costs and increased compliance monitoring for buildings of all types. Luckily, each candidate has acknowledged the significant effort required by property owners and propose leveraging federal funds to accomplish such a task. With more than half of America already committed to some standard of energy efficiency policy, NAA encourages proposals that ensure financial mechanisms are in place to make policy compliance accessible and affordable.
While infrastructure and climate talks appropriately encompass housing issues, the candidates’ arguments for social equality provide some of the most direct impacts to housing. Candidates look to elevate historically oppressed communities through policies that will assist with rental payments, expand access to financing and increase availability of government benefits with the following proposals.
Castro, Michael Bennet and Klobuchar would expand the Section 8 Housing Choice Voucher (HCV) Program; Castro would go so far as to transform the program into a fully funded entitlement program that will cover all families making under 50 percent of the annual median income (AMI). The candidates’ attention to the HCV Program is laudable, however, NAA would like to see more discussion on enhancing the program to maximize its capacity for success. NAA strongly supports the mission of the HCV program and urges each candidate to address the barriers that discourage many property owners from participating. We believe that proposals in this area should focus on streamlining the program to make it work for all parties involved to ensure optimal results.
At least three candidates want to make rent more affordable for those residents who are considered rent burdened. Booker, Castro and Kamala Harris will push for their own versions of a renter’s tax credit that will provide annual reimbursements for all rental payments exceeding 30 percent of their income. This direct benefit to renters is well-intentioned, however, NAA is concerned about potential unintended consequences. We continue to review the various versions of this concept.
Both Harris and Warren aim to increase individual creditworthiness through expansion of the Fair Credit Reporting Act and the Community Reinvestment Act, respectively, thus impacting the ways in which individuals are approved for tenancy. Harris’ proposal, which would include rent, utility and phone payments in an applicant’s credit analysis, will give property owners and operators a clearer picture of a prospective renter’s payment history.
Regarding evictions, Booker, Delaney and Klobuchar have all noted their intention to establish a federally-funded right to counsel fund for low-income residents facing eviction.
Sanders released details of his housing affordability strategy, pushing for a national rent cap of no more than 3 percent or 1.5 times the inflation rate. However, 40 years of research shows the significant, negative impacts of rent control. There is the great likelihood that this proposal, like the others before it, would achieve the inverse of its intention and development of critically needed rental housing would decline, as would preservation of existing housing.
Finally, no report on social equality would be complete without mentioning Yang and his Freedom Dividend, a Universal Basic Income (UBI) offshoot that will guarantee every American $1,000 a month in lieu of social welfare benefits.
When analyzing each candidate’s policy agenda, we must remember that housing is a foundational issue greatly impacted by other components of their platforms. And as policies continue to take shape, candidates must remember that the apartment industry houses nearly 38.7 million Americans. New policies should benefit all parties involved in the housing process and there must be reforms to existing programs that do not deliver. NAA will press for more in-depth and more nuanced housing policy discussions as the vetting process for presidential candidates continues and election day draws near.
This is a summary overview of the 2020 Presidential Candidates. NAA will be submitting a questionnaire on housing affordability to the candidates later this month, and their responses will be made available in a future edition of UNITS. For more information on the 2020 Presidential Candidates’ Housing Policies, please contact NAA Manager of Public Policy, Sam Gilboard.