By Cindy Chetti, Senior Vice President, Government Affairs, NMHC
Cindy Vosper Chetti is Senior Vice President for Government Affairs, with responsibility for implementing strategy for all legislative and regulatory issues of interest to the National Multifamily Housing Council and National Apartment Association Joint Legislative Program.
At a time when housing providers are facing increasing pressure to meet booming demand, an overly burdensome regulatory infrastructure is forcing financers, developers and operators to manage numerous compliance hurdles and rising costs. Housing affordability, driven by a lack of supply, is a top issue plaguing communities nationwide. The only way out of this crisis is to build more housing—but the current political and regulatory environment make it incredibly hard to do so.
Housing providers, and particularly apartment owners and developers, must balance a wide array of concerns regarding project viability and regulatory costs and compliance at all levels of government.
We understand that smart regulation can play an important role in ensuring the health and well-being of the American public, but the regulatory environment can be a disincentive to investors and can increase the cost of a transaction and ultimately impact the viability of a deal.
Imposing additional federal regulation on top of what is already an overly complicated set of regulations at the state and local levels will disincentive investors, and further exacerbate the supply shortage, ultimately hurting our nation’s renters.
NMHC-NAHB (National Association of Home Builders) research found that many regulations can go far beyond the important goals of ensuring the health and well-being of the public, and instead impose costly mandates on developers that drive housing costs higher. In fact, according to that research, regulation imposed by all levels of government account for an average of 40.6 percent of multifamily development costs.
Currently, policymakers are considering a multitude of regulatory and legislative proposals on a broad array of issues—including AI, revenue management, broadband, rent control, evictions, financial and criminal screening, energy efficiency standards and building codes, just to name a few. Each of these has the potential to impact the investment, ownership and operations of housing providers. And importantly, does nothing to address the root cause of the housing affordability crisis.
A key pillar of NMHC’s advocacy efforts is working with the various federal agencies to ensure proposed policies do not have a negative impact on housing affordability. To date, we are working with eight different agencies on over 30 proposals and rules. Last year, NMHC submitted over 50 regulatory letters on a number of critical regulatory and legislative issues. As of this writing, no new federal mandates have been implemented, but NMHC continues to work to ensure that no new federal mandates that would negatively impact affordability and operations are enacted.
Use the drop-down feature below to explore some of the regulatory efforts underway that have the potential to impact housing providers and the renters we serve:
On June 28, the Supreme Court overturned the longstanding Chevron doctrine which granted deference to an agency’s reasonable interpretation if a statute were deemed ambiguous. This decision will create a host of challenges for the Biden Administration’s push on its regulatory agenda, impacting the way federal agencies regulate in different areas like energy efficiency, technology and AI, and leaving previous and future regulations open to a wealth of legal challenges. This case is extremely impactful to all those beholden to regulations promulgated by agencies—including housing providers. With this repudiation of the landmark Chevron precedent, we expect it will likely encourage more challenges to agency interpretations of statutes and increase uncertainty in the regulatory environment.
NMHC Members Can Learn More Here: https://www.nmhc.org/news/nmhc-news/2024m/supreme-court-overturns-chevron-deference/
- NMHC and NAA Submit Comments to FTC/CFPB on Resident Screening
- NMHC and NAA Submit Comments to FTC on Rental Housing Fees
- NMHC Leads Coalition Letter on Fees and Banning Bulk Billing
Early in 2023, the Biden Administration released the White House Blueprint for a Renters Bill of Rights which outlined a set of principles and best practices for tenant protections. This initiative presented a roadmap for both federal agencies and state and local governments to update and promulgate new rules, guidance and notices aimed at improving the resident’s experience. NMHC and NAA have led the response to the White House Blueprint for a Renters Bill of Rights to push back on onerous federal regulation on issues like screening, fees, source of income and rent control.
NMHC Members Can Learn More Here:
https://www.nmhc.org/news/nmhc-news/2023/what-you-need-to-know-latest-updates-on-the-white-house-resident-centered-initiatives/
- HOME Investments Partnerships Program (HOME)
- Methodology Changes for Calculating Section 8 Income Limits
- 30-day Notification Requirement Prior to termination of Lease for Nonpayment of Rent
- Proposed Criminal Screening Rule to Reduce Barriers to HUD-Assisted Housing
- New Rule on Federal Flood Risk Management Standards
- Guidance on Application of the Fair Housing Act to the Screening of Applicants for Rental Housing
- Request for Information Regarding Iron, Steel, Construction Materials, and Manufactured Products Used in Housing Programs Pursuant to the Build America, Buy America Act
- 60-day Notice of Proposed Information Collection on Numerous Forms Regarding an Applicant's Eligibility for Admittance to Subsidized Multifamily Housing
- Affirmatively Furthering Fair Housing Final Rule – Soon to Be Released
NMHC focuses on preserving efficient property operations and promoting more effective housing development. This enables the industry to attract the capital investment needed to increase and improve the nation’s housing stock for the long-term. As such, NMHC is highly engaged with HUD on the following initiatives. While NMHC supports adequate funding for these necessary programs, it’s essential we also prioritize reform efforts that ensure greater private participation.
Apartments are a capital-intensive business that require a diversity of debt sources to provide mortgage financing for a wide array of properties. Almost nothing has the ability to impact the health of the apartment industry like reliable access to credit. Here is a snapshot of what NMHC is working on in this space:
- RFI on Tenant Protections for Enterprise-backed Multifamily Properties
- Housing Affordability Goals
- Proposed Building Code Changes for Enterprise-Backed Properties
- RFI on Mission of Federal Home Loan Bank
- FHFA Announcement of Required Renter Protections for Multifamily Properties Financed by Fannie Mae and Freddie Mac (the Enterprises)
The ongoing health of the apartment industry relies on preserving the mortgage liquidity currently provided by the GSEs in all markets during all economic cycles. NMHC urges lawmakers to recognize the unique needs of the multifamily industry and to retain the successful components of the existing multifamily programs in whatever succeeds them. NMHC is engaged with FHFA on the following activities:
- Phasedown of Hydrofluorocarbons
- Lead Hazards in Housing
- Water Heaters
- Cooking Products
- Refrigerators
- Clothes Washers and Dryers
- Distribution Transformers.
NMHC and NAA support incentives for innovative, cost-effective environmental performance and energy efficiency strategies, while ensuring policies do not hinder apartment constructability, operations and affordability.
Over the last year, the Administration has put forth a number of environmental initiatives, energy efficiency standards and regulatory mandates for appliances that have far-reaching implications for the industry. NMHC has recently submitted comment letters on the following environmental proposals and Appliance Efficiency Standards:
NMHC Members Can Learn More Here: https://www.nmhc.org/industry-topics/industry-topic-updates/energy-efficient-commercial-buildings-deduction-policy-updates/
NMHC strongly opposes regulatory and legislative actions that disproportionately favor unions above the interests of employees and businesses. Here’s what we’re currently tracking with the DOL:
Tax policy is one of the most consequential issues facing the multifamily industry, and NMHC closely watches tax regulations that serve to provide guidance on tax laws and impact real estate transactions. Here is a snapshot of what we’re currently tracking:
- Cybersecurity Incident Reporting
- Proposed Ban on Bulk Billing Agreements
- Digital Discrimination Final Rule
- Cyber Incident Reporting for Critical Infrastructure Act (CIRCIA) Reporting Requirements
Technology policy remains front-and-center for Washington at a time when rental housing providers, developers and operators are working rapidly to invest in emerging technologies to meet resident demand, improve property operations and reduce costs. Policymakers in Washington are engaged. In fact, the Administration and Congress have announced several proposals that will impact housing and technology providers. NMHC is closely tracking these proposals and educating policymakers to do no harm to the multifamily broadband and technology markets. The following proposals are just a few we are currently tracking: