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Hello, apartment industry advocates.
Boy, I did not see that coming! While Republicans, as predicted, will take over control of the House of Representatives in 2023, no one foresaw a razor-thin 4-seat majority. In the Senate, while Republicans were only given a roughly 50/50 chance of taking the chamber, few expected them to not only pick up zero seats but lose an incumbent seat where Pennsylvania Lt. Governor/Senator-elect John Fetterman defeated Mehmet Oz to replace retiring GOP Senator Pat Toomey. This pick up gave the Democrats their majority, regardless of what happens in the runoff election in Georgia between Senator Raphael Warnock (D) and challenger Herschel Walker (R). The widely assumed red wave never reached shore, but it only takes 218 in the House to secure a majority, so despite the narrow margin, divided government returns to Washington next year.
But before we get into what awaits us in the new year, let’s not forget that there are still several weeks remaining in the 117th Congress. Much work remains to be done – maybe – before sine die adjournment. Chief among that work is funding for the federal government. Without an end-of-the-year budget bill, Congress will have to pass a temporary “continuing resolution” that only extends current funding for all departments, including Defense, State, HUD, etc., into some point next year. Other “must-pass” items are the National Defense Authorization Act, the National Flood Insurance Program, domestic disaster relief and support for the Ukrainian war effort.
While it is not a sure thing, chances seem high that all of these items as well as some expiring tax provisions could be combined into one “omnibus” legislative package and sent to the President before the end of the year. No one is confirming this, however, until after the race for the Georgia Senate seat is decided. Should a deal be in the offing, NAA is pressing Congress to attach key proposals to address housing affordability, including reforms to Section 8 in the Choice in Affordable Housing Act as well as removing local barriers to development.
Looking to 2023, what can we expect from divided government? Is this good or bad for providers of rental housing? No surprise, the proverbial bag is mixed. Controversial legislation will have a hard time passing either chamber, which could help us block bad bills, but also make the pathway harder for legislation we support.
As we have discussed before, divided government means that federal regulatory activity is ascendant. And, based on recent activity by the White House, we can expect the Biden administration to pursue its agenda via HUD, the CFPB, the FTC and the DOJ on matters like resident screening, evictions, algorithms and more. Be assured, however, that the new Republican Majority in the House will be conducting aggressive oversight of regulatory activity by the administration.
Speaking of the Biden Administration’s agenda, NAA, alongside a wide coalition of rental housing advocacy organizations, continues to speak directly to White House policy leaders about the impacts of tenant protection. NAA Chairman of the Board Don Brunner, NAA President and CEO Bob Pinnegar and members of the NAA government affairs team have participated in two calls organized by the Domestic Policy Council and including representatives of HUD, the Federal Housing Finance Agency and other regulators. The goal of these discussions is to address housing instability through so-called “resident-centered property management practices.” NAA is helping the Administration understand how rental housing functions and the real-world impacts of proposals like extended notice periods on the operational and financial stability of these communities. We expect the discussions to continue, but some proposal to come from the White House in the not-too-distant future.
Our last Legislative and Regulatory Update call is December 14. I highly encourage you to join us. Register here. Thanks for reading. Stay safe.
- Greg