Happy Tuesday and another Free rentalThis week’s stories include:
- The federal government awarded the “Resident Assistance” grant to the AIDS Healthcare Foundation, which recently settled a lawsuit filed by residents over “inhumane” conditions at the facility.
- Seattle’s affordable housing mandate has led to less housing being built.
- Washington, DC’s affordable housing sector is in financial crisis due to rising operating costs and years-long court processes to evict tenants who don’t pay rent.
But first! Top news about the Senate Republicans’ new housing bill.
Tim Scott vs. Chassis Requirements
On Thursday, a group of Republican senators led by Sen. Tim Scott (R-South Carolina) Introduced The Renewing Opportunity for the American Dream (ROAD) Housing Act, which proposes a variety of reforms to federal housing programs.
Unlike a series of federal YIMBY (Yes in my backyard) bills introduced in recent years, Scott’s bill does not seek to encourage, nudge or bribe local or state governments to relax zoning regulations: “Housing policy is inherently a local issue, and federal lawmakers should encourage local solutions to local problems.” read Press release regarding the bill.
Still, the bill does include at least one idea to increase housing supply.
This includes eliminating federal regulations that require prefabricated homes to be built on permanent steel chassis.
Residential building codes for traditional homes built on-site are set by state and local governments. Manufactured homes, which are built off-site and transported to their destination, are regulated by the U.S. Department of Housing and Urban Development.
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Housing experts have long pointed to HUD’s requirement that prefabricated homes be built on a permanent steel chassis after delivery as a major headwind against prefab production.
Chassis requirements for HUD Main person responsible The huge decline in prefabricated housing production since the 1970s, or Just a little less devastating But it remains an unnecessary and costly regulation.
Whatever the outcome of this debate, everyone can agree that eliminating chassis requirements would reduce the cost of building the cheapest homes on the market.
Scott’s bill would also remove the cap on the number of public housing units that can be “converted” into other types of subsidized affordable housing under HUD’s Rent Assistance Demonstration (RAD) program.
RAD is Intended Addressing the massive overdue capital investments needed for public housing complexes by shifting these complexes to other programs where funding is more certain and private capital is available.
Under current law, the number of public housing units that can be converted through the RAD program is 455,000 (Nearly half of public housing).
Nonprofit accused of running slum housing wins $10 million ‘tenant support’ grant
Last week, I reported that the U.S. Department of Housing and Urban Development (HUD) awarded the AIDS Healthcare Foundation (AHF) and the Massachusetts HUD Tenants Coalition $10 million in grant funding to be jointly distributed to tenant associations of privately owned, federally subsidized apartment buildings. The tenant associations will use the funds to help landlords maintain their buildings and provide habitable living conditions.
HUD’s decision to award this grant to AHF is highly questionable, given the organization’s track record of managing its own housing properties. To quote from my article:
An in-depth Los Angeles Times investigation published in November 2023 reported numerous problems in AHF-owned properties, including cockroach-infested apartments, exploding radiators, frequent water shutoffs that forced tenants to defecate in trash cans, violent crime and drug dealing going unchecked, and elevators that would stop working for months, trapping disabled tenants on upper floors or forcing them to sleep in the lobby.
While many of these problems are common at Skid Row’s residential hotels, AHF-managed facilities receive more code violation complaints and emergency calls than similar properties, the Times reported.
Former AHF employees described living conditions in the foundation’s facilities as “inhumane.”
Just yesterday, AHF settled a class action lawsuit brought by tenants of a Los Angeles building. The nonprofit Agreed They are offering tenants partial rent refunds, hiring elevator consultants, and working with pest control experts to combat pest infestations in the building.
HUD said in a statement that AHF was “part of the team that applied for this award. This team was not only qualified, but was the most highly qualified applicant.”
One might think that nonprofits that haven’t been accused of placing tenants in “inhumane” conditions would be more qualified to help tenants fight for better living conditions, but that’s not the case, according to HUD.
In Seattle, affordable housing mandates lead to fewer homes
Seattle’s Mandatory Housing Affordability (MHA) program, like all “inclusive zoning” programs, is based on the idea that building new housing will somehow make housing unaffordable.
When Seattle rezoned its “urban villages” to allow for higher density under the MHA program, it required developers to build below-market rate housing or pay affordable housing fees instead to offset the impact of new, large projects on housing prices.
The program has been controversial from the start. Warned The cost of the Department of the Interior’s housing mandate would make fewer projects feasible. It has been A Seattle homeowner has sued over $77,000 in MHA fees he was assessed when he tried to build an additional unit on his property to house his adult children.
Earlier this month, researchers Jacob Crimmel and Betty X. Wang published a new study that backs up the complaints of MHA critics.
“We found that areas that were upzoned and had mandated housing price inflation saw a significant decline in new housing construction.” They write“Developers have purposefully avoided MHA-zoned areas, despite the upzoning, choosing instead to build on nearby blocks that have no affordability requirements.”
Their study found that the difference in construction rates between MHA and non-MHA blocks is up to 70 percent.
This confirms past research on inclusive zoning policies in other cities: inclusive zoning policies increase the cost of building housing, driving up costs and reducing construction.
DC’s housing affordability crisis
Most of DC’s subsidized housing programs don’t make enough money to cover their operating costs. Report BisnauThis puts the properties themselves at risk of foreclosure and low-income housing tenants at risk of being evicted if foreclosed. Biznow story:
A Washington, D.C. study found that more than 80 percent of DC’s subsidized housing properties don’t generate enough rental income to pay the mortgage and maintenance costs. Department of Housing and Community Development.
moreover:
The scale of this crisis is deemed existential: According to DHCD, 22,000 homes housing 48,000 vulnerable residents are currently at risk of foreclosure.
Landlords blame the situation on rising operating costs, combined with housing court delays caused by D.C.’s pandemic-era eviction policies that allow tenants to remain in their homes for years without paying rent.
Delinquencies have increased dramatically, the report says. [ by Apartment and Office Building Association] They conclude that this is because Washington’s pandemic-era policies have tripled the length of the legal process required to evict tenants who are behind on their rent.
While the cases have been postponed, many tenants have continued to live in their units without paying rent, accumulating tens of thousands of dollars in debt and finding themselves in huge financial difficulties that are difficult to escape, leaving landlords with significantly reduced afloatation income and few options to increase it.
Quick Links
- Kevin Erdmann RealPage and its contradictory critics.
- California voters will vote on Proposition 33 in November to decide whether to lift state limits on local rent control policies. In anticipation of the measure’s passage, San Francisco politicians have Already drafting regulations Extends rent control to housing built after 1979.
- Atlanta is Threatening If the owner of a property deemed blighted does not repair the structure to the city’s satisfaction, eminent domain can be exercised.
- Britain’s new Labour government wants to build new towns to tackle the housing affordability crisis. Report The New York Times.
- Minnesota YIMBY Reorganize After a painful legislative session in which most of the bills came to nothing.
