Elizabeth Warren, Jamaal Bowman Want To Give Lina Khan the Power To Impose Rent Control on the Whole Country
Progressive Democrats in Congress, led by Sen. Elizabeth Warren (D–Mass.) and Rep. Jamaal Bowman (D–N.Y.), are urging the White House to marshal all available organs of the regulatory state to impose rent control on the entire country.
A letter authored by the two, and signed by 50 members of Congress, proposes seven actions of varying radicalism and legality that President Joe Biden could take to cap rent increases.
“We urge your Administration to pursue all possible strategies to end corporate price gouging in the real estate sector,” reads the January 9 letter to Biden. “Simply put, the rent is too high and millions of people across this country are struggling to stay stably housed as a result.”
The pandemic saw the federal government dramatically expand its role in rental housing markets by imposing eviction moratoriums and allocating billions in funding for rent relief and housing for the homeless.
The letter from Democrats in Congress echoes demands by left-wing housing activists to retain and expand on those emergency interventions. The post-pandemic increase in rents, they argue, represents an ongoing emergency that demands a robust federal response.
In August 2022, the National Housing Law Project (NHLP) and the National Low-Income Housing Coalition (NLIHC) sent their own letter to Biden administration officials, making the case for many of the same interventions Congressional Democrats are calling for now.
Chief among them is a demand that the Federal Housing Finance Agency (FHFA), the independent regulator and conservator of Fannie Mae and Freddie Mac, impose anti-price gouging protections (aka rent control) and “just cause eviction standards” on properties with government-backed mortgages.
Where exactly the FHFA would get the legal power to impose rent control on properties with a Freddie- or Fannie-backed mortgage isn’t discussed in Congressional Democrats’ letter.
As precedent, the NHLP and NLIHC letter cite the FHFA’s pandemic-era requirement that property owners voluntarily entering into FHFA’s mortgage forbearance program not evict tenants during that time.
In that case, the eviction limits were limited to property owners voluntarily accepting a government benefit, i.e., mortgage forbearance.
Importantly, the FHFA justified its mortgage forbearance program as necessary for fulfilling its statutory mission of ensuring the financial soundness of Fannie and Freddie: it was not in the financial interest of either company to start mass foreclosure proceedings against homeowners who would likely be able to start making mortgage payments again in a few months.
In his new book Shelter From the Storm, former FHFA director Mark Calabria notes that private banks and even auto loan creditors also created voluntary mortgage forbearance programs.
The demand from Congressional Democrats today is that the FHFA enforce price controls on properties with federally backed mortgages solely as a subsidy to renters and not out of any concern for the financial health of the government-sponsored enterprises it controls. That is almost certainly
Article from Reason.com