For the past two years rent control has been one of the top legislative trends in the multifamily housing industry. While the industry has seen both victories and losses on this front, the fight against tenant-popularized rent control bills continues. Which cities are being targeted next? If you have properties in California, Illinois, or Providence, R.I., you’ll want to look out for these rent control initiatives.
Since the housing crisis, the demand for affordable rental housing has skyrocketed as Americans have shifted from a homeownership mentality to a renter mentality. As Richard Florida from CityLab might argue, the migration from suburban homeownership to renting has been increasing since 2006. In fact, from 2006 to 2014 the number of U.S. renter households did increase by 5%. With a large percentage of the renter population concentrated in or near urban areas, some of the most major cities in the U.S. lack the necessary housing supply to meet the demand.
The demand for reasonably priced rental housing has been reaching new heights in major metros, with renter rates escalating the renter population in individual states. Cities like California, New York, and North Dakota had a renter population in 2015 that exceeded 15% of the state’s population. As rentals are often centered near urban areas, major metros (like New York, Los Angeles, Chicago, Houston and Philadelphia) have become some of the top unaffordable rental markets in America. Many cities have even issued emergency declarations due to a housing shortage. While the need for affordable rental housing is certainly an issue, rent control isn’t going to fix that.
While reviewing new talent to join your company, you’ll now have to keep in mind that bills banning the use of criminal history are joining the ranks of “ban the box” legislation as the new trend. 2018’s record with employment legislation is just beginning, but the number of 2017 salary history bills carrying over to the New Year, across multiple states, has already set the tone. Hold onto your hard hats, because it’s likely that employment legislation is going to have a bumpy ride in 2018.
2017 was undoubtedly a busy year for multifamily legislation. With bills like California’s immigrant housing protections and the City of Seattle’s ban on criminal records within background reports, you’ll start to feel the effects of these passed bills this year. Take a look at pending and future multifamily housing legislation that could affect properties across the U.S. in 2018, and be aware of legislative trends that surfaced last year. One prominent bill in one state could very easily turn up in another state down the road.
Congress’s H.R. 1, the “Tax Cuts and Jobs Act,” passed on November 16th and it is now up to the Senate to vote on this bill. According to the New York Times, Republican party leaders are hoping to bring it to the Senate floor by this Friday. While the rental housing industry has been relatively optimistic about this bill, provisions (like the removal of private activity bonds within the low-income housing tax credit) raise concerns.
If you weren’t aware of rent control legislation, now is the time to be active. Bills proposing rent control (as well as restrictions on eviction and criminal records) have become an alarming trend within the multifamily housing industry. Just last week, I went with other CIC™ tenant screening experts to Washington, D.C. to lobby on behalf of the National Consumer Reporting Association. Our big concern is that without access to eviction or criminal records, property owners and managers like you will not have the information to determine if a rental applicant is a risk or not. While plenty of owners combat potential risk by raising the rent or fees, if rent control measures pass, that option will no longer be accessible.
Unfortunately, states like California, Oregon, Illinois, and Maine have already been targeted by rent control activists – and it seems like this is only the beginning. Take a look to see what multifamily legislation has passed and failed this November, and what bills will likely be reviewed in the Spring of 2018.
Governor Brown has recently signed a “ban the box” employment bill into law. AB 1008 further restricts California employers’ abilities to use criminal records when making an employment decision. This not only affects your employment process and job application, but this amendment also affects your denial process (if based on the applicant’s criminal history).
U.S. District Court Judge Richard Matsch ruled that Colorado’s sex offender registry law was unconstitutional early this September, citing the Eighth Amendment’s “cruel and unusual punishment”, as it impeded on offender’s ability to find work or housing after completing probation and parole. While this ruling has no immediate effect, even on the three sex offenders who wanted to remove their information from the registry, if the case is appealed and upheld by the federal 10th Circuit (which includes courts in Colorado, Kansas, Utah, New Mexico, Wyoming and Oklahoma), then it would be binding.
With the deadline close, Gov. Brown has finally signed the bulk of the proposed California multifamily housing legislation. While none of the newly passed legislation will affect your tenant screening, you might want to review your rental application and leasing documents. Take a look at the multifamily housing legislation we’ve had our eye on below!
A California housing immigration bill, AB 291, passed the senate on September 6, 2017 and is currently awaiting Governor Brown’s signature. This bill would prohibit landlords and property managers from inquiring into the immigration or citizenship status of a rental applicant or tenant, and from providing that information to law enforcement. While it is uncertain whether or not the Governor will sign this California housing immigration bill, it is extremely likely that he will. Moving forward, you should reevaluate your policies if this bill is enacted.