Senator Warren Plan Strong on Housing Need, Tough on Housing Providers
With the Iowa Caucus soon to be a distant memory, Senator Elizabeth Warren (D-Mass.) is seeking to woo the rest of the country amidst a groundswell of support generated for Vice President Joe Biden and Senator Bernie Sanders (I-Vt.). Sen. Warren’s campaign has been built on thorough and comprehensive policy plans for most domestic issues. In fact, Sen. Warren’s housing platform, based off of the American Housing and Economic Mobility Act she introduced in March, was among the first to be issued to the public and has since been updated to reflect the national demand for solutions to the housing crisis.
The plan reads clear: We are facing a housing crisis that remains unresolved due to local land-use rules that place upward pressures on the cost of housing. Sen. Warren’s plan will see $500 billion, by far the largest amount pledged by any candidate, invested in the development or preservation of 3 million affordable housing units. This is a step in the right direction, as the nation faces a demand for new housing that will require 4.6 million new housing units be developed by 2030. To combat state and local level barriers to development, Sen. Warren plans to create an incentivization fund rewarding communities that eliminate policies proven to inhibit housing growth. Identifying and reducing the development hurdles faced by industry practitioners will facilitate the growth and affordability of the nation’s housing stock.
Alas, the plan’s bold financial commitment and purge of misguided land-use practices appear to be the only components of the plan that work in tandem with the housing industry to solve the housing crisis.
Throughout her housing plan, Senator Warren invokes an adversarial relationship between property owner and renter that amplifies the belief held by some that housing providers want to do everything other than just that: Provide housing. This is a disappointing and concerning rallying cry that can find both good and bad actors in the housing industry lumped together with no distinction between the two. At face value, certain components of Sen. Warren’s housing plan appear restrictive and harmful to the very demographic that it intends to help.
For instance, Sen. Warren will tie federal grant dollars to a jurisdiction’s successful efforts to establish rent control laws or repeal existing preemptions. Rent control policies discourage developers and investors from building new housing and prevent reinvestment in the existing stock. Rental housing providers often look to avoid the unnecessary financial and administrative burdens created by local “rent boards” that are established to govern landlord-tenant concerns for rent-controlled units, delay maintenance and cancel major capital improvements. Returns on investments become negligible and overall real estate property values plummet. Not to mention this type of federal incentivization can cause deep division between a local government and the housing providers on which the community depends, increasing the potential for providers to take homes off the market rather than comply with such damaging policy.
Furthermore, the plan encourages the creation of a federal just-cause eviction (JCE) standard. Sen. Warren contends that portions of her plan’s $500 billion price tag will be contingent on jurisdictions affirmatively adopting just-cause eviction rules. JCE is restrictive policy that limits a housing provider’s ability to quickly respond to resident concerns, straining the relationship between housing provider and resident. JCE weakens the housing provider’s ability to manage the well-being of their community and ensure the safety of their property and residents.
Under Sen. Warren’s plan, property owners are greatly exposed to legal action by residents with the establishment of a federal tenants’ cause of action standard. This would allow residents to bring legal recourse against a property owner for what they believe is an illegal eviction. Such policy will place housing providers at great legal and financial risk.
Sen. Warren’s background fits with the arguably confrontational posture she adopts vis-à-vis housing providers. During the Obama administration, Sen. Warren helped establish the Consumer Financial Protection Bureau (CFPB), the federal watchdog meant to protect Americans from predatory practices by financial firms large and small. Under a Warren Administration, a Tenant Protection Bureau will be established within the U.S. Department of Housing and Urban Development (HUD) with a mission of enforcing federal tenant protection standards and administering grants to state and local groups wishing to sue for violations of tenant protections. The mission of this new entity appears redundant with that of HUDs Office of Fair Housing and Equal Opportunity. In addition, the plan will require housing providers to disclose certain damaging pieces of data that can greatly affect prospective residents’ decisions to select housing, including average rent and previous building code violations. Inquiries regarding rent are already commonplace during a property tour and if a code violation has been rectified, there is no legitimate reason to disclose that issue. The tone of this proposal feels like a presumption of guilt on the part of all housing providers in an effort to protect renters from isolated bad actors.
Sen. Warren’s housing plan, while well-intentioned, includes a set of components that will, ultimately, harm the housing industry and its ability to provide safe, quality and affordable housing. Sen. Warren and her fellow candidates would benefit from focusing on advancing industry-supported solutions, not unsustainable short-term fixes, to tackle this crisis. The National Apartment Association (NAA) would welcome the opportunity to engage with Sen. Warren and our nation’s housing providers to find common ground and craft impactful policy to meet our housing affordability needs.
The National Apartment Association will provide ongoing coverage of the 2020 Presidential Election Cycle highlighting its importance to the multifamily housing industry. Stay tuned for more spotlights on candidates’ housing policies, debate analysis, and much more. For more information on the 2020 Presidential Election, please contact NAA Manager of Public Policy, Sam Gilboard.