The Presidential election—and the policies proposed by each candidate—will have significant implications for the multifamily industry. From housing affordability to regulatory reform, the candidates have staked out distinct platforms on a variety of key issues.
While it is still unclear which candidate will win election, NMHC remains focused on analyzing proposed policies put forth by both candidates. To that end, NMHC published an analysis of President Biden’s tax proposals. This week, we are focusing on both candidates’ housing plans and, specifically, key provisions impactful to the multifamily industry.
Background
Although the Trump Administration has not issued a comprehensive housing plan ahead of the election, we can look at past choices on housing policy to get a picture of what we might expect from a second term. A major focus of the Trump Administration has been regulatory reform, and when it comes to housing, this Administration has sought to identify ways to remove barriers to developing housing. The creation and promotion of the Opportunity Zones program, enacted as part of the Tax Cuts and Jobs Act, represents a central element of this strategy. The following provisions are key housing-related provisions proposed under the Trump Administration.
- Reducing barriers to developing and preserving affordable housing.
- Replacing several Obama-era housing discrimination rules, namely the Affirmatively Furthering Fair Housing (AFFH) and the Disparate Impact Rules.
- Promoting the Opportunity Zones tax incentive designed to attract investors to neglected neighborhoods.
- Reforming and streamlining HUD programs to incentivize greater private-sector participation and public-private partnerships.
Former Vice President Biden released a comprehensive housing plan that commits to investing $640 billion over 10 years in programs to “promote housing that is affordable, stable, safe and healthy, accessible, energy efficient and resilient, and located near good schools and with a reasonable commute to their jobs.” Biden's housing proposal, which can be found on his campaign website, lists the following four principles and then provides details on how he intends accomplish these stated goals:
- Ending redlining and other discriminatory and unfair practices in the housing market.
- Providing financial assistance to help hard-working Americans buy or rent safe, quality housing, including down payment assistance through a refundable and advanceable tax credit and fully funding federal rental assistance.
- Increasing the supply, lowering the cost, and improving the quality of housing, including through investments in resilience, energy efficiency, and accessibility of homes.
- Pursuing a comprehensive approach to ending homelessness.
Potential State of Play
While both President Trump and former Vice President Biden are proposing to modify programs and policies impacting multifamily housing, these will have to be adopted either through the legislative or regulatory process. President Trump’s agenda includes significant regulatory proposals, many of which could be adopted through Executive Orders and without congressional approval, such as the recent CDC Eviction Moratorium. In contrast, a large portion of Vice President Biden’s proposals would require legislative action. Success for enactment of these proposals during a potential Biden presidency would depend on several factors. First, while Democrats are likely to retain control of the House of Representatives, a Democratic Senate majority is uncertain. Moving the Biden agenda through a Republican Senate or even a narrowly controlled Democratic Senate could prove challenging due to the fiscal impact of some of the provisions. In addition, the Vice President’s ambitions for housing policy proposals may have to be reshaped to fit into a domestic legislative agenda focused on COVID-19 relief, infrastructure and health care. Moving large discrete housing proposals outside of one of those priorities could prove challenging as Congress tends to focus on one large item at a time.
Detailed Analysis
Use the drop-down menu below to learn more about specific issues of interest to the multifamily industry:
Biden Viewpoint: The Biden housing plan does not specifically address issues specific to housing finance reform and the current conservatorship status of Fannie Mae and Freddie Mac. However, it is anticipated that former Vice President Biden would be in no hurry to lessen the focus on ways to use the Enterprises to boost housing affordability and promote homeownership. The one explicit mention of Fannie and Freddie in the Biden housing policy blueprint calls for boosting a government-run affordable-housing trust fund by $20 billion, funded by increasing assessments charged by the mortgage giants.
Trump Viewpoint: In September 2019, the Trump administration released a sweeping plan to remake the U.S. housing market and release Fannie Mae and Freddie Mac from conservatorship. Most of the Trump administration’s proposals require action by Congress, but the Federal Housing Finance Agency (FHFA), Fannie Mae and Freddie Mac’s regulator, could take some actions on its own that would impact the mission and operational activities of the agencies.
NMHC Viewpoint: NMHC remains committed to ensuring access to capital in all markets during all economic cycles and will remain vigilant to prevent discrete changes or comprehensive reform efforts from endangering availability of capital for the apartment industry.
Biden Viewpoint: Similar to legislation introduced in the House and Senate during the current session, Biden’s proposal is calling for enhanced access to legal assistance for renters facing eviction, including additional funding. This proposal is paired with expanded eviction diversion programs, including mediation, payment plans and financial literacy education programs.
Trump Viewpoint: The Trump Administration has not supported efforts to permanently alter the eviction process or related state and local landlord-tenant law. In September, however, the Administration used an executive order to institute a temporary, nationwide eviction moratorium designed to mitigate the spread of COVID-19. The CDC Order includes specific criteria that directly ties the moratorium to those experiencing hardships and does not interfere with underlying payment obligations such as rent or fees.
NMHC Viewpoint: Evictions are an option of last resort, but are the only legal remedy to remove a resident who has breached a lease. Given the complex nature of housing policies at the state and local levels, Congress should not apply a one-size-fits-all approach. The appropriate federal role in evictions is leveraging federal dollars to help at-risk residents avoid financial hardship in the first place.
Biden Viewpoint: Modeled after the California Homeowner Bill of Rights, Biden’s proposal would create or codify a series of new homeowner and renter protections, most notably formalizing source of income protection for Section 8 voucher holders.
Trump Viewpoint: Trump has not put forth a proposal outlining a housing bill of rights.
NMHC Viewpoint: In recent years, largely in an effort to address the nation’s growing affordable housing shortage, a number of states and localities have made source of income a protected class. Meaning, a property owner cannot choose to reject an applicant based on where his income comes from as long as it is a lawful source (e.g., alimony, child support or other compensation). This also includes Section 8 housing subsidies. There are many reasons why a private property owner may choose not to participate in the Section 8 program. It has been plagued with inefficiencies and onerous bureaucratic requirements. Owners who participate are subject to often cumber-some program restrictions, such as repetitive unit inspections, resident eligibility certification and other regulatory paperwork. All of these make it more expensive for apartment firms to operate their communities. For this reason, Congress specifically made the program voluntary. However, these local source of income protections effectively force apartment firms to reluctantly participate in the program. NMHC is committed to addressing the critical affordable housing supply crisis and to reforming the Section 8 program in a way that encourages more private sector participation.
Biden Viewpoint: The Biden housing plan establishes a $100 billion fund aimed at encouraging the development and preservation of affordable housing, including $65 billion for State Housing Authorities to construct and rehabilitate housing in communities where affordable housing is in short supply; $10 billion to make homes more energy efficient; $5 billion to increase the stock of affordable housing in larger community development; and $20 billion for the Housing Trust Fund.
Trump Viewpoint: The Trump Administration has chosen to address the nation’s affordability challenges by signing a number of Executive Orders. For example, on December 12, 2018, President Trump through executive order established the Council to support the Administration's pledge to encourage public and private investment in urban and economically distressed areas, including Opportunity Zones; and later in June of 2019 established a White House Council on Eliminating Regulatory Barriers to Affordable Housing.
NMHC Viewpoint: A growing number of families at all incomes are struggling to find housing they can afford. Federal, state and local governments must reduce barriers to developing more rental housing and leverage the strength of the private sector to both produce new housing and preserve existing apartments. At the federal level, Congress can take steps to incentivize more development and preservation. They can expand the Low-Income Housing Tax Credit and enact a comparable Moderate-Income Housing Tax Credit. They can also preserve and increase funding for subsidy programs that address housing affordability, including HOME, Section 8, FHA Multifamily and CDBG. In addition, they can provide regulatory relief to reduce development and operating costs.
Biden Viewpoint: The Section 8 Housing Choice Voucher program has long been underfunded and plagued with inefficiencies. The Biden Housing plan would reconstitute the voucher program as an entitlement akin to other social safety net programs. In doing so, every eligible household applying for a voucher would receive one. This change removes congressional discretion, and at times dysfunction, from the annual funding process for vouchers, which are traditionally funded at one-fourth of the estimated national need on an annual basis.
Trump Viewpoint: The Trump Administration has not supported an increase in funding for the Section 8 program, but has focused on identifying ways to streamline the program to address some of the inefficiencies that discourage private-sector participation.
NMHC Viewpoint: Reform and increased funding for the program is a top priority for NMHC. Although Biden’s plan would fully fund this important program, its many inefficient and duplicative requirements discourage private providers from accepting vouchers. Reform of the program to address these inefficiencies must be part of an expansion of the program to encourage private housing providers' participation in the voluntary program.
Biden Viewpoint: Biden’s housing plan includes a provision championed by his running mate, Senator Kamala Harris (D-CA). Their renter’s tax credit proposal is designed to help ease housing affordability struggles for renter households that do not qualify for voucher assistance. Biden is proposing to establish a $5 billion tax credit to reduce housing costs to 30 percent of household income, similar to voucher assistance.
Trump Viewpoint: The Trump Administration does not appear to have taken a position on a renter’s tax credit.
NMHC Viewpoint: The nation is facing an affordable housing supply problem, and while a renter’s tax credit may appear to bring relief to low- and moderate-income households, the incentive does nothing to address the supply shortages across the income spectrum. Instead, NMHC supports increasing funds for key housing affordability programs such as section 8, CDBG, HOME, Homeless prevention and the LIHTC program. In addition, we must look for new and innovative ways to incentivize the production and renovation of more housing that is affordable—including reducing barriers at the state and local level.
Biden Viewpoint: Biden’s plan would expand federal investment in LIHTC with an additional $10 billion, make the credit more efficient and ensure that urban, suburban and rural areas can all benefit from the credit.
Trump Viewpoint: While the Trump Administration has not put forth a specific LIHTC proposal, the President signed into law, legislation to increase LIHTC authority by 12.5 percent for 2018-2021 and authorized income averaging so that LIHTC could serve a wider array of households.
NMHC Viewpoint: Given the nation’s severe shortage of affordable housing, Congress in March 2018 rightly increased LIHTC authority by 12.5 percent for 2018-2021. Congress also sensibly authorized income averaging so that LIHTC could serve a wider array of households. Congress should continue to invest in the LIHTC’s success by making permanent the increase in program authority, as well as further augmenting credit authority by 50 percent. Additionally, Congress should establish a minimum four-percent tax credit rate, akin to current law’s minimum nine-percent credit rate, so that investors may derive its full value. Under current law, the four-percent credit rate floats and is worth considerably less due to low interest rates.
Biden Viewpoint: Along the lines of bills introduced by leading Democrats in Congress, Biden’s plan would require grantees/recipients of federal funds through programs like Community Development Block Grants (CDBG) and Surface Transportation Block Grants to pursue housing policies to expand supply and dismantle existing barriers to development and preservation of affordable housing.
Trump Viewpoint: The Trump Administration initially signaled support for fighting exclusionary zoning using a variety of methods, including CDBG and AFFH. The Administration also established a multi-departmental task force to examine regulatory barriers to housing chaired by HUD Secretary Ben Carson. However, President Trump and his campaign surrogates began messaging against their previous position in the summer of 2020, with a particular focus on “preserving” suburbs from increased density and mixed-income housing development, which they argue “would bring projects and crime to suburbia.”
NMHC Viewpoint: NMHC strongly supports breaking down barriers to development to support the creation of housing and, therefore, chip away at our nation’s growing housing affordability crisis. Exclusionary zoning and redlining are antiquated policies that harm economic growth and opportunity across our nation and NMHC believes the federal government must do more to leverage its financial resources and power to incentivize long-overdue change at the state and local level.
Biden Viewpoint: Biden’s plan seeks to reverse the Trump administration changes to HUD’s Disparate Impact Rule, which broadly impacts the housing industry in areas including resident screening, operational practices, project development and financing.
Trump Viewpoint: The Trump Administration has sought to revise the Obama-era Disparate Impact Rule to align with subsequent legal outcomes, including a Supreme Court decision.
NMHC Viewpoint: NMHC has long-raised concerns that HUD’s existing disparate impact doctrine created uncertainty for housing providers and undermined the use of necessary business practices. The proposed revisions directly address a number of our priorities and is an important step in addressing barriers to new apartment development and housing affordability.
Biden Viewpoint: The Biden plan would implement the Obama-Biden administration’s Affirmatively Furthering Fair Housing Rule (AFFH) and require communities receiving certain federal funding to proactively examine housing patterns and identify and address policies that have a discriminatory effect.
Trump Viewpoint: The Trump Administration suspended this rule in 2018 and issued a new, final rule in July 2020. The new rule, “Preserving Community and Housing Choice,” repeals the original 2015 AFFH regulation. The Administration is claiming that the rule was an attack on single-family zoning and would ultimately lead to the demise of the suburbs.
NMHC Viewpoint: NMHC strongly supports the Fair Housing Act and the mission of the Affirmatively Furthering Fair Housing regulations, we have long advocated for changes to AFFH that focus on growth, expanding supply, eliminating regulatory burdens and correctly addressing housing affordability in every community.
Biden Viewpoint: Changing course from the current rewriting effort by the banking regulators (OCC, FDIC, Federal Reserve), Biden is proposing the CRA be targeted toward its traditional method of assessment and implicitly expanded in focus toward consumer access to credit and stringent enforcement for lenders, fin-tech, non-bank lenders and some insurance companies.
Trump Viewpoint: During the Trump Administration all three banking regulators, with Trump appointee OCC Joseph Otting leading the effort, began a joint CRA rewrite that has since fractured into separate timelines for each banking regulator.
NMHC Viewpoint: The existing CRA rules are outdated, lack transparency and do not reflect the modern-day banking industry. NMHC continues to stress that any CRA updates should ensure that the borrowing and investment needs of the multifamily industry continue to be served.
