Biden’s “Bill of Rights” for Renters

 

Demetrios Georgalas

I was interviewed for a CBS in Austin (and other local Sinclair affiliates) news story, Biden Administration Proposes ‘Bill of Rights’ to Protect Renters in Tight Housing Market. The text of the story opens,

Data shows that more than a third of Americans — about 44 million people— rent their homes. As rent prices soar amid inflation and supply struggles, the White House has just announced a plan to address the problem.

The national average rent-to-income (RTI) reached 30% for the first time in our 20+ years of tracking history, up 1.5% from year-ago or 0.2% from Q3, keeping the growth rate constant throughout the second half of last year,” a new report by financial services firm Moody’s Analytics says.

Now, the Biden administration is hoping to ease some of that market pressure with regulations that would include potential limits on rent hikes in certain properties.

The proposal is meant to make renting more affordable and protect tenants but some close to the issue say they don’t want the government to get involved.

The rent hikes have affected people of all age groups in cities nationwide but now, in a non-binding “Blueprint For a Renter’s Bill of Rights,” the Biden administration provides guidelines to protect them.

According to the plan, the Federal Trade Commission and the Consumer Financial Protection Bureau will explore ways to take action against practices that prevent people from getting and staying in housing.

The U.S. Department of Housing and Urban Development says it will propose requiring certain tenants who miss a rent payment to get 30 days’ notice before ending their lease. For certain properties, the Biden administration also asked the federal housing finance agency to look into potential limits on rent hikes.

Rents have gone up dramatically in many communities in ways that we didn’t expect as you said during the COVID crisis. I think we’re seeing major major long-term trends that are playing out that isn’t great for renters,” said David Reiss, a professor at the Brooklyn Law School.

Reiss believes the White House’s multiagency approach is more about looking at best practices for processes like eviction but it isn’t dramatically changing the landlord-tenant relationship.

The National Apartment Association provided a statement saying that they’ve “made clear the industry’s opposition to expanded federal involvement” in that relationship, adding that “complex housing policy is a state and local issue.”

Reiss says since rent regulation is currently left up to every state, it’s important for renters to know their rights.

“You want to know if you have a right of notice as to when you’re rent is gonna increase and what happens if a landlord doesn’t give that to you. You’re going to want to know if there’s a limitation on rent increases, and you want to make sure that your rent does not increase at a higher level than that,” Reiss said.

The Fate of the CFPB

photo by Lawrence Jackson

President Obama Nominating Richard Cordray to Lead Consumer Financial Protection Bureau, with Elizabeth Warren

The United States Court of Appeals for the District of Columbia issued a decision in PHH Corporation v. Consumer Financial Protection Bureau, No. 15-1177 (October 11, 2016), that found an important aspect of the structure of the CFPB to be unconstitutional:  the insulation of the Director from Presidential supervision. While this decision will almost certainly be appealed, even if it is upheld, it will allow the the CFPB to continue functioning much as it has.

I was interviewed about the decision on NPR’s All Things Considered in a segment titled, Appeals Court Orders Restructuring Of Consumer Financial Protection Bureau (audio available). The transcript reads,

AUDIE CORNISH, HOST:

A federal appeals court has mandated big changes to the Consumer Financial Protection Bureau. The three-judge panel says the consumer watchdog agency is set up in a way that’s unconstitutional. In its ruling, the court says the agency will have to restructure. NPR’s Yuki Noguchi reports.

YUKI NOGUCHI, BYLINE: The suit was brought by a mortgage lender called PHH, which asked the court to invalidate a $109 million enforcement action against it and scrap the agency, too. The D.C. Court of Appeals sent the fine back to the bureau for review.

But it also ruled that the CFPB’s director has too much power to write and enforce rules without enough oversight from another branch of government. The remedy, the panel says, is that the CFPB should fall under the president’s control. And the president should be able to remove the director at will.

The CFPB’s opponents in the financial services industry declared victory. Bill Himpler is executive vice president for the American Financial Services Association.

BILL HIMPLER: Our issue is still with the authority given to a single director. That is, as the court pointed out, not subject to a lot of oversight.

NOGUCHI: Himpler instead supports a CFPB run by a bipartisan commission, similar to others like the Securities and Exchange Commission. David Reiss, a law professor at Brooklyn Law School, says the ruling is not an existential challenge to the CFPB or its past decisions.

DAVID REISS: The decision does not invalidate the CFPB’s actions. This is more about its structure going forward.

NOGUCHI: Reiss says an appeal to the Supreme Court is all but guaranteed. Indeed, the CFPB says it disagrees with the conclusion. In an emailed statement, a spokesperson says the ruling does not change its mission and that it is, quote, “considering options for seeking further review of the court’s decision.”

Dennis Kelleher is CEO of Better Markets, a group that advocates for stronger financial regulation. He says the bureau’s actions on banks have made the financial sector more determined to undercut the agency.

DENNIS KELLEHER: They do not want a consumer watchdog on the Wall Street beat. That’s what this fight is about.

NOGUCHI: The decision was not unanimous on all the issues. Judge Karen Henderson dissented in part, saying the panel overreached in calling the bureau’s structure unconstitutional. Yuki Noguchi, NPR News, Washington.