FHFA Releases Summary of Tenant Protection Comments
The Federal Housing Finance Agency (FHFA) recently released a summary of responses it received after issuing a Request for Input (RFI) on how the agency could create and enforce renter protections for households living in rental properties with federally backed mortgages, namely through Fannie Mae and Freddie Mac. This RFI was significant because more than 12 million renters live in properties with federally backed mortgages and any renter protections created by FHFA could cover a significant share of renters across the nation.
The agency’s action seeking comments was announced with the publication of “Blueprint for a Renters Bill of Rights,” a white paper published early last year by the White House Domestic Policy Council and National Economic Council. The paper made special mention of the LIHTC program in its discussion how federal, state, and local governments should do all they can to ensure renters know their existing legal rights, and to protect renters from unlawful discrimination and exclusion that can take many different forms.
According to the FHFA, the RFI was an opportunity to collect information that highlights tenants’ experiences and stakeholders’ perspectives and solicit ideas for improved data collection to better quantify the size and scope of the issues identified by tenants. The summary notes that a wide range of stakeholders responded. These include tenants and tenant advocates, nonprofits, lenders, multifamily borrowers, multifamily property owners, housing providers, landlords, developers, government officials, elected officials, and mortgage industry groups. Their comments were generally placed into the following areas:
Access, Barriers to Housing
The RFI asked several questions about access and/or barriers to housing, including how the Enterprises might support the universal acceptance of legal sources of income, how the Enterprises can support existing federal fair housing laws, and potential areas where leases or the tenant application process might be streamlined. Tenants and tenant advocacy groups generally supported banning source of income (SOI) discrimination on any legal source of income. Many commented that FHFA should require multifamily owners to adopt occupancy limitations less restrictive than two persons per bedroom to increase access to housing and not discriminate against familial status under the Fair Housing Act. And some responders suggested requiring owners to provide uniform screening criteria to every prospective tenant who applies to live in a unit.
Access to Information
The RFI sought questions on how to improve access to information for owners and tenants. Respondent themes in this section of the RFI included model lease agreements, transparency around leases and hidden fees, educating multifamily property owners and tenants, and suggestions regarding a “rental registry/database/portal” where owners would provide property ownership and contact information.
Tenant Housing Stability
Several tenants experienced housing instability and evictions, which had wide-ranging impacts including homelessness, poor physical/mental health, adverse educational consequences, and economic losses. Tenant and tenant advocate commenters stated that owners and managers of FHFA-backed properties should be required to reduce evictions to improve tenant housing stability. They suggested owners should participate in eviction diversion programs where they exist and emergency rental assistance programs where available. Additionally, some respondents recommended that multifamily property owners commit to finding alternatives to eviction, such as by engaging in mediation over lease violations, offering lease modifications when they could improve stability, and offering lease rescission. Some respondents also recommended FHFA mandate that tenants have a right to counsel.
Some respondents suggested that FHFA define a new set of housing habitability standards and incorporate language preventing owners from issuing any type of termination notice following identification of potential health and safety issues by a tenant. Respondents proposed three ways of identifying health and safety problems: resident interviews, visual assessments, and environmental sampling.
Data and Research
FHFA had asked stakeholders to identify opportunities for the agency to enhance data collection and research on resident-centered management policies, procedures, and practices at multifamily properties. Some respondents recommended maintaining a public database on multifamily properties that would provide aggregated, nonidentifiable data on ownership type, address, management company, number of units, whether units are subsidized and subsidy sources, rent prices at time of financing, and rental payments. Some commenters also suggested owners and managers publicly report eviction filings and judgments, as well as any violations of federal, state, or local laws.
Another suggestion was to start tracking the outcomes of existing tenant protections. For example, during the COVID-19 pandemic, many jurisdictions adopted eviction diversion programs to help limit the number of evictions taking place during the crisis, and many of those programs have continued after the state of emergency was lifted. Some respondents recommended conducting a study of such programs to identify model programs and best practices to incorporate into FHFA’s underwriting standards as preferred practices that in turn receive incentives for voluntary program participation or enactment.
Future Initiatives
According to FHFA, the responses gathered in the RFI suggest that significant work will be required to advance resident-centered practices at multifamily properties with federally backed mortgages. The agency found that the responses will be important to FHFA’s future exploration of resident-centered management practices at applicable properties. FHFA says it intends to continue its public stakeholder engagement process in 2024.