Democratic Sens. Tim Kaine and Mark Warner are urging the Federal Housing Finance Agency to limit rent increases for tenants who live in the roughly eight million units in multi-family properties with federally-backed mortgages.
As the problem grows worse, Virginia’s Democratic Senators Tim Kaine and Mark Warner, are attempting to address the issue and give renters in the commonwealth some relief and support.
Kaine, Warner, and more than a dozen other lawmakers in Congress have written a letter to Federal Housing Finance Agency (FHFA) Director Sandra Thompson urging her agency to ensure that tenants’ rights are protected in any multifamily properties with financing backed by Fannie Mae and Freddie Mac (the Enterprises).
Fannie Mae and Freddie Mac are federally-backed home mortgage companies that buy and guarantee mortgages issued through lenders in the secondary mortgage market. Mortgages backed by the companies support 40% of all multifamily rental units nationwide—roughly eight million apartments—according to the Mortgage Bankers Association.
The lawmakers call for eight “common sense” tenant protections, including:
- Limiting rent hikes in properties with financing backed by Fannie Mae and Freddie Mac;
- Requiring good cause for evictions and lease non-renewals and adopting a strong definition of “good cause,”—such as serious and repeated lease violations (like nonpayment of rent)—to ensure that tenants are protected against unfair, discriminatory, and retaliatory evictions;
- Requiring owners to maintain housing that meets or exceeds standards for safety, accessibility, and quality;
- Establishing comprehensive asset management procedures to ensure housing safety and quality;
- Enforcing protections against discrimination under the Fair Housing Act, as well as protecting against presumptive exclusion based on information in tenant screening reports, such as a prior eviction or credit score;
- Ensuring the timely provision of any tenant screening report to applicants upon request;
- Posting property owner/manager information online to help ensure renters have access to their landlords;
- Ensuring that tenants are able to organize within their buildings and communities if need be.
“There have been repeated reports of investors using low-cost financing from Enterprise-backed loans to buy properties and then sharply raising rents, mistreating tenants, and allowing buildings to fall into disrepair,” the letter reads. “The most effective way to ensure that Fannie Mae and Freddie Mac are fulfilling their obligations is by implementing tenant protections for all renters living in properties they back.”
In addition to their list of demands, the lawmakers also ask the FHFA to establish an office within the agency dedicated to ensuring compliance with those requested protections for tenants. The letter states that the office should work alongside existing staff to ensure that property owners, as well as lenders and Fannie Mae and Freddie Mac, are maintaining their properties.
Finally, the lawmakers urge the FHFA to continue to coordinate with the Department of Housing and Urban Development, the Department of Agriculture, and other appropriate agencies “to prevent and address housing quality and management deficiencies in federally-subsidized properties with Enterprise-backed mortgages.”
These protections, the lawmakers say, will begin to address the challenges tenants face, as well as set clear expectations for property owners who benefit from Fannie Mae and Freddie Mac-backed financing.