NMHC Update on Election Day 2021

The dust is still settling from yesterday’s elections, but one thing is clear for our industry: housing policy was once again on the ballot in many key races. Most alarming, rent control reared its head once again. However misguided and dangerous, this flawed policy response to the housing affordability crisis was at the center of major ballot initiatives and mayoral races.

The following is a brief snapshot of yesterday’s results.

Ballot Initiatives: Rent Control Movement Advances in the Twin Cities

Ballot initiatives continue to be a popular route for activists seeking to push through rent control. Voters in both Minneapolis and St. Paul weighed in on high-profile rent control ballot measures. In both cities, pro-rent control forces secured 53 percent of the vote.

In Minneapolis, the measure does not automatically trigger the implementation of rent caps. Rather, it provides the city council with the authority to consider rent control laws. Mayor Jacob Frey, who is leading in the first-round of ranked choice voting in his reelection effort, expressed his support for the measure because it establishes local control, though he has stated that he remains opposed to rent control itself. Instead, he favors giving property owners up to a 40 percent break on their property taxes if they keep at least 20 percent of their rental units affordable to households whose family income is at or below 60 percent of Area Median Income.

The St. Paul measure is among the most extreme we have seen. It caps annual rent increases at three percent without exemptions for new construction or inflation. It is a true setback for those committed to finding effective solutions to address the cost of housing in St. Paul. We are deeply concerned that it will serve as a model for other cities that are trending more progressive.

Mayors: Split Decision in Key Cities as Progressive Candidates Lean In on Rent Control

A pair of mayoral races confirmed that the threat of rent control is alive and well. In Boston, Michelle Wu handily beat her moderate city council colleague, Annissa Essaibi George, by appealing to progressives in part through a promise to bring rent control back to the city. Rent control is still prohibited in Massachusetts, but Wu aligned herself with State Reps. Mike Connolly of Cambridge and Nika Elugardo of Boston as they try to advance legislation that would allow for localities to adopt rent caps. Boston and Massachusetts broadly need to be closely watched as the new mayor takes office and the state legislature reconvenes in 2022.

In Buffalo, the race has yet to be called, but self-proclaimed Democratic Socialist India Walton appears headed for defeat against Democratic incumbent Byron Brown, who mounted a competitive write-in campaign after being defeated in the primary. Walton, who received support from Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez, ran on a platform of establishing a “tenant’s bill of rights” that establishes just cause eviction and rent control, among other policies.

Governors: Republican Victory in Virginia; New Jersey Incumbent Murphy Likely to Hold On

Every four years, following a presidential election, the entire political world turns its head towards Virginia’s off-year gubernatorial election to sharpen partisan narratives and predict the future based off of the results. But in 2021, the razor-close race (most polls heading into Election Day were within the margin of error) between Democrat Terry McAuliffe and Republican Glenn Youngkin has decidedly impacted the housing policy outlook for Virginians. Voters heard both candidates articulate their view of the housing challenges facing their state, specifically as it relates to affordability.

Virginia’s population has grown nearly 8 percent over the last decade, creating unprecedented demand for housing that has led to very real affordability challenges in the Old Dominion. And like everywhere else, COVID-19 compounded those challenges. This is especially true in the Northern Virginia population centers that helped decide the race on Tuesday. With their collective voice sending newcomer Glenn Youngkin to the governor’s mansion, voters can expect a prioritization of building new supply during the Governor-elect’s administration.

While housing wasn’t a major plank of Youngkin’s platform, the political newcomer brought his private sector experience to the fore when discussing the issue of housing affordability in debate performances during election season. In Youngkin’s view, the cost of permitting and regulation related to housing construction (which his campaign pegged at 20-25 percent of total costs) is standing in the way of fresh housing supply that would bring costs down for Virginians. “If we actually make it easier to permit, and we can bring down the cost of housing,” he said in last month’s debate. He wants to make it easier for builders to build. But his housing policies are light on specifics, and it remains to be seen what a deregulatory effort led by the soon-to-be governor will look like. Following the surprising wave at the top of the ticket in support of Youngkin, Republicans may also reclaim the majority in the House of Delegates after losing it in 2020, opening the door to legislative proposals important to Youngkin getting airtime. Votes are still being counted in many of the races. We’ll have to wait and see if an attempt to streamline and reduce the costs of building new housing statewide will be a priority, but Virginians seemed to support a less heavy-handed government approach with their votes. The Virginia Senate remains in Democratic hands.

In the nation’s only other gubernatorial race this cycle, New Jersey Governor Phil Murphy faced a surprisingly strong challenge from Republican Jack Ciattarelli but looks to hold his gubernatorial seat.

Closing Thoughts

Housing affordability is a major challenge across the U.S. and housing will continue to be a major theme in city councils, state legislatures, Congress and in future elections. Activists have proven that their desire for extreme measures, like rent control and eviction moratoria, is durable, despite the pandemic nearly being behind us. They've effectively organized to push harmful rent control policies in the Twin Cities, and there's little reason to believe they won't continue pushing in state legislatures and city councils in 2022. NMHC will continue to remain vigilant and work hard to push back against these dangerous policies. In their place, we will work closely with lawmakers to advance policies that will truly address housing affordability, namely measures that will spur the development of a broad range of housing.

Looking ahead, a more in-depth analysis of the election results and the possible implications for the multifamily industry’s federal issues will be included in the Friday, Nov. 5th edition of the ApartmentWire newsletter.

Jim Lapides jlapides@nmhc.org