Tenant rights organizer sees opportunity amid housing crunch

As economic power concentrates in the housing market amid the highest inflation in 40 years, one tenant rights activist sees an opportunity to pursue fundamental changes in the way America approaches affordable housing. .

Tara Raghuveer, founder of Kansas City’s influential Tenants Union and organizer of the National Federation of Tenants Unions, is leveraging the social and financial pressures currently weighing down the housing sector to We are working to produce effective outcomes that we see as potential policy diamonds. Rent caps for landlords who apply for tax credits for the construction of low-income housing.

In April, the Department of Housing and Urban Development, in part as a result of aggressive organizing by Raghuveer and his colleagues, approved a 10 percent tax credit for the federal program known as the Low-Income Housing Tax Credit (LIHTC). Enacted restrictions on rent increases. As well as other tenant-centered advocacy groups.

Although the 10% cap is much higher than the 3% cap that advocates had called for, Raghuveer believes the framework marks a milestone in recent U.S. housing policy.

“This is precedent-setting in that it is the first time in recent history, to our knowledge, that the government has seriously considered the possibility of conditioning federal finances on this type of protection,” she wrote in The Hill. said in an interview.

Low Income Housing Advocate supported an effective rent capAn organization representing Commercial builders and real estate industry Gritting my teeth at the change, it was “[picking] There will be winners and losers.” However, he acknowledged the possibility that “the range of rent increases may be reduced for some tenants.”

As commercial organizations are aware, the cap design is not a traditional rent regulation; Fixed to change Some LIHTC properties have high national average income levels and, according to Raghveer’s calculations, are subject to conditions with a “slightly unstable” upper limit, making it difficult for tenants to identify.

But Raghuveer says that’s just the beginning. She and her group, the National Federation of Tenants Unions, are looking beyond the $13 billion per year LIHTC program to move the much larger government-backed mortgage backers Fannie Mae and Freddie Mac within the housing finance institutions. We are considering this as a place to expand tenant protection. It has already gained support from the public.

Fannie Mae and Freddie Mac, which were nationalized under public conservatorship in the wake of the 2008 financial crisis, issued more than $100 billion in mortgage loans in 2023 and more than $142 billion in 2022.

These government-sponsored enterprises have been both public and private at different points in their history, and their accounting methods vary by agency. Congressional Research Service It even says the ultimate cost to U.S. taxpayers to support them is “unknown.”

but Congressional Budget Office The annual cost of the program, which reflects overall subsidy costs adjusted for market risk, is estimated at $6 billion, or about $64 billion over the next 10 years. It is public money and Raghuveer believes there should be conditions attached to it.

“The government actually does business with landlords. Fannie and Freddie do $150 billion a year in business with landlords, even more than LIHTC. “There should be conditions to do so,” she said.

Housing issues are now on the forefront for many American households, with housing costs rising especially sensitive to changing monetary policy conditions following a series of rapid interest rate hikes by the Federal Reserve.

Although the U.S. economy has shown surprising strength throughout 2023, it is finally starting to show signs of stress, with both first-quarter gross domestic product (GDP) and April jobs numbers falling short of expectations.

The housing inflation rate has been declining since last year, following the rise and fall of the overall consumer price index (CPI), but it is still at a high level of 5.7% annual increase. Mortgage interest rates are above 7%, near the highest level in more than 20 years.

Meanwhile, rental prices have increased 29.4% over the past four years, an average annual increase of 7%, according to a February report from real estate company Zillow.

“The biggest driver of consumer price increases right now is shelter costs,” former Federal Reserve economist Claudia Sahm told The Hill in a recent interview. “A house is [about] It’s currently 60 percent of the CPI. ”

Sensitive to housing pressures, Democratic lawmakers created the Congressional Renters Caucus in 2023 and recently called for an expansion of the federal housing voucher program, along with stronger protections for renters, including subsidies to prevent evictions.

“Voters across the country are struggling to find and maintain housing in an increasingly unaffordable rental housing market,” they wrote in a May letter to House appropriators.

Beyond the housing sector, the economy’s price hikes and associated cost-of-living pressures are increasing, especially as social safety nets put in place by the federal government to deal with the pandemic have been allowed to dismantle and expire. It has political influence.

Coordinated labor organizing in key sectors of the economy has resulted in major contract victories for several major unions, including the United Auto Workers, which secured the reinstatement of cost-of-living adjustments after the recent strike in Detroit Ta.

For Raghuveer, who thinks equally about the personal lives of voters and the political dynamics of the various groups they represent, the opportunity presented to organizers by this period of economic pressure is a combination of different political interests and Concentrating on concentration.

“[When I started doing this], some organized around public housing, some repealed the ban on statewide rent control, and others organized around rights and protections at the local level, but without much success. “I couldn’t do it,” she said. “What ultimately became clear to me was that the main thing that was missing was power, especially power among the people most affected by this issue, and that clarity was very uncomfortable. It was something.”

“We cannot continue with the status quo,” she added. “Something has to give.”