Coalition Urges FHFA to Implement Rent Control
November 21, 2022.
A coalition of renter advocates is urging the White House to use administrative action to implement rent control on multifamily properties.
Why it matters: A divided Congress is not going to pass nationwide rent control. But advocates are looking to the executive branch to unilaterally impose price controls on the cost of housing. The Federal Housing Finance Agency (FHFA) oversees Fannie and Freddie and is a regulator advocates identified as a main target for taking action on rising housing costs.
What they’re saying: The Homes Guarantee Coalition, comprising over 200 tenant unions, community organizations, and legal advocates, drafted a Rent Regulation Executive Order that would aim to cap rent growth using regulatory authority. Among other mandates, they propose FHFA:
- Limit rent increases on GSE-backed multifamily mortgages to 1.5 times CPI or 3%, whichever is lower, on an annual basis.
- Create a public database of owners of residential rental properties.
- Mandate “good cause eviction” regulations on GSE multifamily loans.
The draft order would task the Federal Trade Commission (FTC) with investigating rental prices across the nation, along with fees or fines related to residential leases. The order also has roles for HUD, Treasury, and the CFPB.
The bottom line: While the White House met with the coalition on November 14, the draft order is unlikely to be signed by the President. Many provisions are of questionable legality and would be subject to litigation. Moreover, the issue in the current inflationary environment in which utility and employee/maintenance costs have risen sharply makes such caps challenging and could limit new supply of multifamily housing.
Our thought bubble: The order provides good insight into the vast powers of the federal administrative state. Although some of the most extreme actions may not advance, the draft could be a blueprint for progressive regulators to take action on rent costs.