NAA NMHC Write to President Trump to Highlight Regulatory Initiatives

REGULATORY ACTIVITY

Repeal Final Rule Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees

REGULATORY CHALLENGE FOR THE APARTMENT INDUSTRY

On April 26, 2024, DOL issued its final rule altering the overtime regulations under the Fair Labor Standards Act. The final rule increases the number of employees eligible for overtime pay. We have weighed in with concerns about the proposal in May 2023 and endorsed legislation that would prohibit DOL from finalizing, implementing, or enforcing its proposed overtime rule. On November 15, the U.S. District Court for the Eastern District of Texas issued a ruling invalidating the entirety of DOL overtime final rule.

DOL should withdraw this rule through the administrative process, which will include publication in the Federal Register and the reopening of the required notice and comment period for legislative rulemaking. Additionally, the agency should announce the notice of withdraw of the rule on its website. The Trump Administration should drop its appeal to the E.D. of Texas decision and not defend the rule in future litigation.

Withdraw Notice of Proposed Rulemaking on “Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings” (Docket No. OSHA-2021- 0009)

REGULATORY CHALLENGE FOR THE APARTMENT INDUSTRY

OSHA should withdraw its proposed rulemaking establishing a blanket national heat safety standard across industries. In NAA and NMHC's response to OSHA's request for public comment, we identified numerous operational and compliance considerations that demonstrated the proposed rule's overreach and inapplicability to the realities of the rental housing industry.

REGULATORY ACTIVITY

Use CRA to Overturn Final Rules Targeting Partnership Related-Party Basis-Shifting Transactions

REGULATORY CHALLENGE FOR THE APARTMENT INDUSTRY

The Treasury Department and Internal Revenue Service on January 14 published final regulations (TD 10028) that require reporting of certain transactions by related parties in partnerships. The final regulations identify certain transactions involving positive basis adjustments exceeding $10 million for tax years after 2025 ($25 million for tax years before 2025) to which no corresponding tax is paid as so-called transactions of interest, which are reportable transactions. Compliance with these requirements is costly and difficult due to the long look-back period. Transactions must be reported on a going-forward basis too. Congress should use the Congressional Review Act process to overturn these regulations.

Treasury and IRS should withdraw this rule through the administrative process, which will include publication in the Federal Register and the reopening of the required notice and comment period for legislative rulemaking. Additionally, the agencies should announce the notice of withdraw of the rule through the publication on its website.

Withdraw Bank Capital Standards: Basel III Endgame

REGULATORY CHALLENGE FOR THE APARTMENT INDUSTRY

The banking regulators were proposing to have the US banking industry comply with the next stage of the international Basel banking regulations. Basel III endgame would go further than the regulation and potentially constrain capital from the largest banks in the US. Treasury and IRS should withdraw this rule.

Review and Revise Clean Water Act Jurisdictional Guidance

REGULATORY CHALLENGE FOR THE APARTMENT INDUSTRY

In September 2023, EPA released its final rule “Revised Definition of Waters of the United States; Conforming; Department of the Army, Corps of Engineers, Department of Defense and Environmental Protection Agency” as part of a long-term effort to define the agency’s jurisdiction under the Clean Water Act (CWA). After the Rule was finalized, the Supreme Court narrowed the agency’s authority under the CWA and the definition is subject to ongoing litigation.

EPA should reconsider Waters of the U.S. (WOTUS) implementation efforts and revise guidance memos as needed to provide certainty for regulated stakeholders.

Officially Close the FCC Multi-Tenant Environment Competition Docket (Docket No: 17-142)

REGULATORY CHALLENGE FOR THE APARTMENT INDUSTRY

On February 15, 2022, the FCC issued a Report and Order and Declaratory Ruling (the “Order”) under the title of “Improving Competitive Broadband Access to Multiple Tenant Environments (“MTEs”),” to examine the terms of agreements between broadband providers and owners of residential, office and retail properties. The FCC has not closed the proceeding and leaves open the possibility of the FCC adopting additional rules governing the terms of contracts between broadband providers and property owners that work against our shared goal of boosting deployment and modernizing our broadband infrastructure. Docket 17-142 should be officially closed to ensure the market's continued success in deploying superior service to most apartments. This should be updated and put out for public notice on the FCC website.

Repeal or Dramatically Limit the Scope of the FCC's Digital Discrimination Order

REGULATORY CHALLENGE FOR THE APARTMENT INDUSTRY

As part of the Infrastructure Investment and Jobs Act, Congress required the FCC to initiate a rulemaking intended to define digital discrimination and enact rules to prevent it. In its final rule, the FCC includes property owners as a "covered entity," which would hold housing providers liable under the FCC’s enforcement scheme if adequate broadband is not available to its renters. The FCC, for the first time, interpreted its regulatory authority to cover property owners in a similar way as broadband service providers in the Rule. This extension lacks legal authority and is a significant departure from the FCC’s existing regulations and should be repealed or dramatically limited.

The FCC should repeal or move to dramatically limit the Digital Discrimination Rule/Order to ensure property owners are not deemed “covered entities” under the FCC Rule. Housing providers are committed to equal opportunity in housing. Moreover, the Fair Housing Act already holds housing providers accountable for discrimination against renters in the provision of services or facilities in connection with renting.

REGULATORY ACTIVITY

Eliminate any ambiguity that the federal CARES Act 30-day notice requirement ended in 2020.

REGULATORY CHALLENGE FOR THE APARTMENT INDUSTRY

FHFA's General Counsel must issue a legal opinion clarifying that the CARES Act 30-day notice requirement is no longer in effect for covered properties, restoring eviction policy to the states. This issue remains a contested issue in eviction courts today and results in increased financial risk for housing providers and renters alike.

Retract FHFA ‘s Three New Servicing Requirements

REGULATORY CHALLENGE FOR THE APARTMENT INDUSTRY

FHFA issued a directive imposing three new federally mandated landlord and tenant requirements on covered multifamily properties financed by Fannie Mae and Freddie Mac (the Enterprises). This directive would apply to rental properties with new loans through the Enterprises that are signed on or after the effective date and covered housing providers would be required to provide their residents with a 30-day notice for rent increases; 30-day notice for lease expirations; and five-day grace period for late fees.

According to the policy grids issued by Fannie Mae and Freddie Mac, housing providers would have to notify their residents of the new protections and change all residential leases at these communities to include the new standards. In our comment letter to the Agency, NAA, NMHC and our coalition partners argued that required leasing compliance with this mandate does not serve the public interest. Required changes to millions of leases are unnecessary, given the layers of state and local requirements with which housing providers already comply. These laws and regulations already provide renters with robust protections.

On February 26, FHFA issued a letter announcing a delay of the implementation of these new tenant notifications until May 31, 2025. We appreciate this delay and we urge FHFA to withdraw this directive permanently.

Withdraw Directive to the Enterprises to Consider Additional Federally-Mandated Landlord-Tenant Requirements

REGULATORY CHALLENGE FOR THE APARTMENT INDUSTRY

As part of the Biden White House Blueprint for a Renters Bill of Rights, FHFA and the Enterprises committed to continue to evaluate resident-centered practices that should be codified and enforced on housing providers with enterprise-backed rental communities. These practices were intended to shift a perceived imbalance of power between housing providers and renters, in favor of renters.

Policy proposals under consideration included failed policies like rent control, a “source of income”-style mandate intended to require housing providers to participate in the Section 8 Housing Choice Voucher program and just cause eviction requirements that limit housing providers’ rights to nonrenew at the end of a lease contract and would result in tenancies in perpetuity.

FHFA should rescind this directive which allows the Agency to mandate multifamily policies through the Enterprises that go far beyond their mission to serve as a reliable source of liquidity and funding for housing finance throughout economic cycles and would conflict with States’ established laws to protect both parties to leasing transactions.

Withdraw the 2025 Scorecard Requirements for the Enterprises to impose federally-mandated landlord-tenant requirements and enforce CARES Act: Thirty Days’ Notice to Vacate.

REGULATORY CHALLENGE FOR THE APARTMENT INDUSTRY

In addition to the above, FHFA formalized its expectation that the Enterprise much “[e]nhance resident-centered practices, such as tenant protections, at Enterprise-backed multifamily properties” in its 2025 Scorecard. We strongly urge FHFA to eliminate this obligation for the Enterprises. In conversations with FHFA leaders, NAA and NMHC have urged the Agency to take a balanced approach to federal policymaking that weighs the needs of all stakeholders equally, as well as broader market considerations. FHFA and the Enterprise should not pursue failed rental housing policies like rent control, source of income mandates or just cause eviction requirements that jeopardize operational integrity of enterprise-backed communities and result in the opposite of intended public interest goals, i.e. reduce access to quality, affordable housing options for renters.

The CARES Act “notice to vacate” requirement exceeds any existing notice procedures prior to an eviction filing. While required notice periods vary widely according to state and sometimes local law, the average notice is six days. Notice is just the first step to start the eviction court process. The CARES Act requirement more than quadruples the notice procedure in some jurisdictions, which translates into more lost rent while housing providers wait months, sometimes more than 1 year, for their day in eviction court. The rental housing industry cannot continue to successfully manage their communities with sustained losses of rental income that result from continued delays of legitimate evictions. FHFA must eliminate any ambiguity that this temporary, pandemic era notice requirement ended in 2020.

REGULATORY ACTIVITY

Withdraw rental industry guidance via FTC’s blog

REGULATORY CHALLENGE FOR THE APARTMENT INDUSTRY

Under the previous administration, the FTC regularly issued business guidance via the agency’s blog, making it difficult for the rental housing industry to understand changes to their federal compliance responsibilities. Blog entries, such as Price fixing by algorithm is still price fixing and Becoming a gold star property manager: Lessons from the FTC’s case against Greystar, circumvent the established rulemaking process under the Administrative Procedure Act and do not allow the public to comment as FTC imposed new standards. Using its blog, the FTC has reinterpreted or expanded its authority under existing laws; these business guidance entries must be withdrawn.

REGULATORY ACTIVITY

Withdraw Securities and Exchange Commission Climate Disclosure Rule

REGULATORY CHALLENGE FOR THE APARTMENT INDUSTRY

The SEC pursued and finalized a rule that would require all public companies to establish a reporting framework that would identify and analyze a set of climate-related impacts by and to the company. The rule was challenged in court and is subject to an injunction that continues today.

SEC should withdraw the rule which will include publication in the Federal Register and the reopening of the required notice and comment period for withdraw of the rule through publication on its website. The federal government should also not defend the litigation against the rule.