White House plans new renter protections

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Joe biden white house

The White House recently announced a series of actions that executive branch agencies will take to improve renter protections and “fairness” in the rental housing market. It also released a document called Blueprint for a Renters Bill of Rights.

The steps that the White House envisions apparently do not involve new legislation. They plan to use the power of regulatory agencies to push housing market participants toward more tenant-friendly policies without involving Congress.

Doing research

The Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) will investigate policies that unfairly prevent people from obtaining or staying in housing. Areas to be examined include “the creation and use of tenant background checks, the use of algorithms in tenant screenings, the provision of adverse action notices by landlords and property management companies, and how an applicant’s source of income factors into housing decisions.” The agencies will use the data collected to “inform enforcement and policy actions”.

Background checks have long been a target of housing advocates given that certain groups are more likely to have criminal records than are others. There has been pressure to not just reject anyone with a conviction but rather to look at the type of offense, how long ago it occurred and the applicant’s history of behavior since release when deciding whether to extend a lease offer to an applicant with a criminal conviction.

The program announcement does not define what is sought in the investigation into the provision of adverse action notices. However, the announcement later says that HUD will require participants in its programs to provide notice at least 30 days before terminating a lease for nonpayment of rent, so this may be a clue to the White House’s objectives.

Ending source of income discrimination has also been an objective of housing advocates. However, these advocates often ignore the real costs government voucher programs impose on landlords in the form of costs for inspections and reporting compliance.

The Federal Housing Finance Agency (FHFA) will look at what actions it can take “promoting renter protections and limits on egregious rent increases for future investments.” Expect new provisions to be added to FHFA supported financing contracts.

The Department of Justice (DOJ) will examine “anti-competitive information sharing, including in rental markets.” Again, this is not defined but it potentially could include sharing rent roll data used as inputs to revenue management systems.

Bill of rights

The first two items in the 5-point Renter’s Bill of Rights are non-controversial. They ask that renters have access to housing that is “safe, decent and affordable” and that leases be clear and should have “defined rental terms, rights and responsibilities.”

Item three asks that governments at all levels make sure that renters are aware of their rights and that these rights are enforced. It also suggests that renter’s rights should be enhanced, but it does not specify what enhancements ought to be considered.

Item four says that renters ought to have the right to organize and that they ought to be able to use the facilities of the rental property, including bulletin boards and meeting rooms, in their organizing efforts.

Item five deals with eviction prevention and states that renters should have access to “resources that help them avoid eviction, ensure the legal process during an eviction proceeding is fair, and avoid future housing instability.” While the term “resources” is not defined, this could mean that they are supplied with legal representation at government expense during their eviction hearing, something that some cities provide today.

The sorts of renter protection issues that these announcements address are usually handled at the state or local level. While it is not clear that it is within the Federal Government’s constitutional authority to involve itself in them, except possibly where the housing providers are participating in Federal programs, it appears that the Biden Administration is hoping to use moral suasion to tilt the balance of power between renters and landlords more in the direction of the renters.