August 10, 2023 |
Updated August 10, 2023
Eighteen associations representing housing providers, lenders and residents today 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 and that 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.
The signatories asked FHFA to reject imposing rent regulation as a condition of Fannie Mae and Freddie Mac-backed financing and instead, create additional voluntary incentives within the GSE programs to expand the supply of needed affordable housing.
Research has proven repeatedly that mandatory rent control is a failed policy which 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. In fact, a February 2022 study indicated that only 27 percent of firms surveyed said that they would be willing to keep their current investments, or add new ones, in rent-controlled markets.
As FHFA considers policy reforms, rather than instituting counterproductive rent control measures, we strongly urge the agency to expand programs that increase the supply of housing, lower housing costs and enhance housing equity and availability.