Nigel Fitzpatrick’s Post

🔍 Industry Stands Firm Against Federal Rent Control 🔍 In response to President Biden’s recent housing action plan, which proposes a 5% rent cap for corporate landlords and the use of public land for affordable housing, the Manufactured Housing Institute (MHI) and a coalition of housing organizations have issued a letter to the White House opposing the rent cap proposal. The coalition’s stance is based on extensive research highlighting the inefficiency of rent control policies that, in many cases, lead to higher rents and reduced housing supply by restricting capital. The coalition emphasized that a federal rent cap only adds complexity to the current mix of state and local regulations, which ultimately discourages investors and limits new housing development. Instead, the coalition urges collaboration with housing providers to implement policies that genuinely expand housing availability—such as the initiatives outlined in the administration’s Housing Supply Action Plan. https://lnkd.in/gdesF4hR #ManufacturedHousing #RentControl #AffordableHousing #HousingPolicy Manufactured Housing Institute

“Harris Housing Plan Aims to Add Three Million Homes. That Won’t Be Easy.” Vice President Kamala Harris, as the Democratic presidential nominee, has announced a plan to address the estimated 2-7 million U.S. housing shortage by adding three million homes in four years. She has not yet released the details of her plan. As reported in The Wall Street Journal article posted in the comments below 👇, her plan is likely to face political opposition. While two components could potentially boost housing supply, a thorough evaluation of the initiative's details is still needed. 1. Encouraging Construction: The plan offers subsidies and a tax credit to incentivize building smaller, affordable homes, tackling the decline in starter homes since the 1970s. 2. Rental Market Expansion: The plan proposes a $40 billion expansion of the Low-Income Housing Tax Credit (LIHTC) with some bipartisan support. The remaining components of her plan are unlikely to effectively address the housing shortage. 1. First-Time Home Buyer Assistance: $25,000 in down payment assistance for first-time homebuyers, costing $100 billion. 2. Regulating Large Landlords: Regulation of large corporate landlords, targeting algorithmic pricing and certain tax benefits to reduce Wall Street’s influence on housing. I encourage Harris to adopt strategies for new housing construction similar to those in the National Association of Home Builders' 10-point plan linked below 👇. - Bipartisan opportunity: Harris supports the Republican proposal to improve home affordability by opening more federal land for building. - Political and Regulatory Barriers: Implementing the plan will require bipartisan cooperation and overcoming local land-use regulations, as communities and governments often resist new construction. 💡 What practical strategies would you suggest for increasing the number of housing units in the U.S.? Share your thoughts in the comments below 👇! Please like 👍, comment below 👇, or share 👉. Click the 🔔 in my profile to get notified of my posts. And follow me for more content like this. #home #multifamily #homerental #buildtorent

#Property - United States plans nationwide rent controls - with a catch US President Joe Biden has announced a plan ahead of the 2024 US Election to cap rent increases across the nation at 5% per annum. On 16 July 2024, the Biden-Harris Administration called on Congress to pass legislation giving corporate landlords a choice to either cap rent increases on existing units at 5% or risk losing current valuable federal tax breaks. The proposal would apply during 2024 and the following two years but would only apply to corporate landlords who own at least 50 units of housing stock. Over 20 million units of rental housing would be affected by the proposal. An exception would apply to new construction and substantial renovation or rehabilitation. Failure to comply would see corporate landlords unable to take advantage of faster depreciation write-offs available to owners of rental housing. It seems unlikely Congress will get on board with the rent control proposal, particularly in the run up to the 2024 Election in November. (As an aside, former President Trump's son-in-law Jared Kushner's somewhat controversial family group controls 20,000 multi-family apartments and would be caught by President Biden's proposal.) The Australian Greens will no doubt pick up on this proposal. Their plans to date have not included a minimum rental housing ownership threshold before their controls kick in. Their plan also has no sunset date - two years of rent freezes followed by a maximum 2% increase every two years thereafter. The Federal government has repeatedly distanced itself from the Greens proposal. The Queensland government has also shut the door on rent controls - for now. https://lnkd.in/gSKs-XJx #USA #Election2024 #Landlord #Tenant #ResidentialProperty #Strata #Law #Lease

The only proven relief valve for the housing crunch is to ease restrictive zoning ordinances. We are trying to do this here in New York City, but we cannot be alone. Of course, rent control is only a small portion of the urban housing stock. Nevertheless, we must remember just how expensive it is to develop anything in NYC. Without tax credits and subsidies, developers would be faced with net losses for many new constructions. Adding more restrictions in an already expensive market would constitute a severe misfire by this administration. #housing #rent #nyc

The problem with the pursuit of affordable housing is that existing home owners don’t want housing to be affordable. Because, for that scenario to exist, the value of their properties will need to fall. And much of our perception of how well the country is doing is inextricably linked with the rising value of our homes. This well intentioned move in Cornwall to help locals get on the housing ladder doesn’t appear to have fixed anything. Despite a slump in second home buyers, there are still two households on the local authority housing list for every second home owned. The problem is exacerbated - not just in Cornwall but across the country - by the reluctance of politicians to approve the building of new homes … because, in a classic supply and demand market that is property, building affordable housing would bring prices down. And new homes that are genuinely affordable are what is needed: not the current definition, usually a % cheaper than the market rate and therefore out of the reach of most, particularly in London. Properly affordable private, social and shared ownership housing and at scale. We need a government that will not only promise to do this but one that will deliver on the promise as well. And those of us who are lucky enough to be homeowners have to accept a hit to redress this terrible situation we’ve got ourselves into. If we don’t, we are genuinely stuck with generational wealth inequality forever. #propertymarket #secondhomes #socialhousing #propertyprices #affordablehousing #newhomebuilding #wealthinequality #generationalinequality https://lnkd.in/eWNxyhwG

President Biden tonight stated in his press conference he will push for a national rent control policy limiting rent increases to 5% (???). This, from an administration which claimed to believe - until tonight apparently - the way to bring down housing costs was to build more housing. In fact, just this spring the administration’s Domestic Policy Council Director was quoted in Politico magazine saying, “We know we need to increase housing supply to ensure that we can bring down the rents and the cost of homeownership.” So what has changed? The laws of economics still apply: build more housing and prices come down. For a succinct explanation of why rent control doesn’t work, take a look at the below article. A couple quotes: “The basic problem with rent control is well-known: A broad cap on rent increases means that many middle-class and even upper-middle-class renters get reduced rents because of the legislation, and the proportion of benefits that go to low-income households who are the ostensible beneficiaries is low.” And, “Developers faced with tangible constraints on prices—and the prospect of those constraints becoming more constricting in the future—find it less profitable to build new buildings, further reducing supply.” #housing #sfr #btr https://lnkd.in/e_rsqMXa

The affordability crisis in the U.S. housing market has led politicians to take desperate measures in an effort to address the issue. A notable example is the current administration's controversial proposal for a nationwide rental rate cap, which could have significant repercussions on the real estate market, potentially resulting in supply shortages and lower quality standards. This insightful article by Judge Glock and @CityJournal delves into the serious consequences that this proposal could have on the U.S. housing market. https://lnkd.in/ejEqiRYk  

New White House Rent Cap Proposal: What It Means for the Housing Market President Biden's recent proposal to cap annual rent increases at 5% for landlords with over 50 units has sparked significant debate. While the intention is to address high housing costs, many experts are concerned about its potential downsides. 📉 Here’s a quick overview of the key points from the article: Industry Reactions: Major housing groups, including the National Association of REALTORS® and the Housing Solutions Coalition, argue that rent caps could lead to reduced housing supply and unintended consequences for renters and communities. Impact on Supply: Critics say that imposing rent controls might deter developers from building new rental units, exacerbating the current housing shortage. With a reported shortfall of 1.5 million units, this could worsen affordability issues. Alternative Solutions: Industry leaders advocate for policies that incentivize the creation of new housing units rather than imposing restrictions. Strengthening tax credits and updating zoning laws could better address the affordability crisis. As the proposal awaits Congressional approval, it's crucial to consider how such measures could impact both current tenants and future housing development. What are your thoughts about the rent cap proposal? Let us know in the comments! Read the full article here: https://lnkd.in/ghsVuYU6 #HousingMarket #RentControl #RealEstate #AffordableHousing #PolicyDebate #MarketImpact #HousingCrisis #RealEstateInvesting

At the NAR Policy Forum in Washington, D.C. on Thursday, Feb. 8, lawmakers discussed several ways to increase housing affordability and how to go about doing that. They dialed in on three proposed acts: the More Homes on the Market Act, Yes in My Backyard Act and Neighborhood Homes Investment Act. The More Homes on the Market Act would increase capital gains tax exclusion and incentivize longtime homeowners to sell. This would ensure homeowners can keep more of their investment when selling – single filers would have a $500,000 exclusion, while couples would have a $1 million exclusion. The Yes In My Backyard Act, which aims to increase the production of affordable housing, encourages localities to cut burdensome regulations. One result of this act would be allowing single-room occupancy development in multi-family housing areas. The Neighborhood Homes Investment Act would help support construction financing. Each $1 billion in Neighborhood Homes investments could result in: 25,000 homes built or rehabbed, $4.25 billion of total development activity, 33,393 jobs in construction and related industries, $1.82 billion in wages and salaries, $1.25 billion in federal, state and local tax revenues and fees, https://lnkd.in/ebEsDXsb

"This report considers how #California can promote #multifamily #housing #development by aligning local government funding streams to reduce their reliance on development #impactfee revenue. On April 12, 2024, the United States Supreme Court heightened the standard under which California local governments can justify fees set by legislated schedules. This ruling has the effect of making it more difficult for local governments to raise revenues with impact fees and requires the legislature or courts to implement the Supreme Court decision by setting new rules. It provides an opportunity for the state to evaluate new policies around impact fees that better address California’s continued and growing housing crisis." "While ostensibly charged to developers, fees are ultimately passed to new #homeowners and #renters in the form of higher home prices and rents. If the fees are too high, projects are rendered financially infeasible." Key Findings: 1. Property tax revenue declined by 53 percent immediately after Proposition 13 passed, falling from 58 percent of local revenue in 1972 to just 36 percent by 2012.   2. Impact fees only account for 2.6% of the average California cities’ reported revenue. However, reliance on revenue from impact fees varies greatly across jurisdictions, from as high as 16% to less than 0.5%. 3. The average impact fee on a multifamily unit in California is $21,703, nearly triple the national average of $8,034. Similarly, California’s average single-family unit fee of $37,471 is triple the national average of $13,627. 4. Developers transfer impact fee costs to homeowners and renters, increasing multifamily unit costs up to $60,000 and single-family unit costs up to $100,000. 5. Most jurisdictions charge higher fees per square foot on multifamily units compared to single-family homes, which disincentivizes multifamily housing construction. In some cases, higher fees for multifamily homes result from overt efforts to block the construction of new apartment buildings. 6. Many cities that had the lowest increases in impact fees had the greatest increases in multifamily housing. Conversely, cities with the greatest increases in multifamily impact fees experienced the lowest growth in multifamily housing. Policy Options Analyzed: 1. Eliminate impact fees and replace this revenue stream 2. Cap fees and replace this revenue stream 3. Increase private enforcement mechanisms to challenge excessive or unjustified fees.