Published Aug 11, 2023 - NAHB
NAHB and 17 other associations representing housing providers, lenders and residents sent a letter to Federal Housing Finance Agency (FHFA) Director Sandra Thompson warning that mandatory rent control and rent stabilization policies will increase rents, reduce the capital needed to boost the supply of housing, and ultimately hurt current and future renters.
As FHFA considers changes for Fannie Mae- and Freddie Mac-backed multifamily properties, the groups cautioned that rent control mandates will exacerbate the housing affordability crisis.
“Implementing failed policies such as mandatory rent control will create instability in an already challenged market and undermine the important goals of fostering a healthy and equitable housing market, increasing supply, and creating successful communities where people of all backgrounds can build their lives,” the coalition stated in its letter. “As such, we respectfully encourage FHFA to refrain from implementing policies like rent control on private rental housing providers and instead focus on leveraging federal resources in the form of incentives to bolster new affordable housing.”
Research has proven repeatedly that mandatory rent control is a failed policy that does nothing to alleviate the root causes of housing affordability issues — namely the fact that our nation’s housing supply has not kept pace with the needs of our growing population. Rent stabilization disincentivizes rental multifamily housing investments across markets, particularly in communities of opportunity that already often have few affordable options.
Moreover, rent regulation is not equitable as it does not target lower- and moderate-income renters that are in most need of assistance, support and stability. Instead, it incentivizes current renters to remain in place for longer periods of time and disincentivizes additional investments in housing, thereby limiting opportunities for others who do not have access to the rental housing market in favor of those that already do. This inequitable approach most impacts people of color who already have limited access to many housing markets, especially those with good schools, nearby public transportation and other amenities.
Implementing rent control would be contrary to the goal and mission of Fannie Mae and Freddie Mac to create more affordable housing opportunities for low- and moderate-income residents. The best way to ease rising rents is to create voluntary incentives within Fannie Mae and Freddie Mac programs to expand the supply of much-needed affordable housing