As the housing crisis continues to worsen, it’s no surprise that renters are in dire need of more rights and protections. With subpar living conditions, unreasonable rent hikes, and the constant threat of eviction, some renters are facing more challenges than ever before. In late January 2023, the White House released a Blueprint For A Renters Bill of Rights which is a step in the right direction towards providing many Americans with the support they deserve. After all, almost 35% of the country lives in rental properties.
As with most initiatives, there are also drawbacks, particularly for real estate investors. Individuals who are not well-versed in real estate investment may think, “Cry me a river”, but I have written many times before about how real estate investment is often a force of good – something I very much stand by.
When done responsibly, real estate investment can bring economic growth, job creation, and improved living conditions to areas that may have been struggling. This investment can help revitalize communities by upgrading existing properties, creating new housing developments, and improving infrastructure – benefitting the local economy and providing families with access to safe, affordable, and quality housing.
The intention behind the White House’s Blueprint for a Renter’s Bill of Rights is certainly noble. The question is, how can we balance the important rights and needs of renters with the business realities of real estate investing?
Principles for a Renters Bill of Rights
Rather than prescribe specific solutions, the blueprint outlines principles that will guide Federal, state, and local authorities as they create policies and regulations. The principles cover five major areas of concern:
- Access to Safe, Quality, Accessible, and Affordable Housing
- Clear and Fair Leases
- Education, Enforcement, and Enhancement of Rights
- The Right to Organize
- Eviction Prevention, Diversion, and Relief
The blueprint clearly outlines each principle’s importance along with several activities being put into action to improve them.
These five areas are important and must be addressed in order for us to find solutions to the housing crisis. We also need to be very careful of the final policies and regulations that are created so that communities across the country do not suffer from any unintended consequences.
The Best Solution?
On one hand, a Renter’s Bill of Rights could be a crucial step toward addressing the injustices faced by renters. It would provide people essential protections such as the right to a safe and habitable living space, the right to fair and reasonable rent increases, and the right to due process if faced with eviction. These are all important measures to help renters become more secure in their homes and prevent unscrupulous landlords from exploiting them.
However, on the other hand, these new protections could also make real estate investment less attractive. The cost involved with providing housing along with the fear of being sued for unfair rent increases or unjust evictions may lead real estate investors to avoid making improvements to their buildings or stop developing new housing altogether. This, in turn, could exacerbate the housing crisis and make it even more difficult for renters to find affordable, quality housing.
We must be sure that the new policies and regulations as a result of the blueprint are not discouraging real estate investors from investing in the housing that is desperately needed in many communities. Policies should be studied and opinions should be gathered from industry experts and economists. Popular ideas may not always be the most effective or long-lasting way to address the challenges renters face. While they may sound good at first, they often do not achieve the desired outcome when put into practice.
For instance, rent increases are a natural occurrence and must keep pace with inflation and property taxes. If rent control measures become too stringent, landlords may not have the financial means to make the necessary investments to maintain their properties and provide renters with quality living conditions.
A recent Boston Globe opinion piece by Greg Vasil (head of the Greater Boston Real Estate Board and coincidentally the instructor of a class I took at Boston University) discusses why initiatives like Rent Control do not help but actually hinder communities and become a barrier to housing production.
Property Owners Need Better PR
This is an important moment when we can change the traditional public perception of property owners as greedy landlords and instead have them viewed as partners in community growth and development. Most property owners are regular people, like you and me, not large corporations. In my interactions with hundreds of property owners across the country, I find the vast majority of them to be good people, not the unscrupulous villains portrayed in the media. We need to change this misconception and not let a few bad apples spoil the whole bunch.
The media’s depiction of evil landlords has shaped public opinion which undoubtedly has been a factor in the creation of this blueprint for a Renter’s Bill of Rights. It’s unrealistic to expect all landlords to be saints, but it’s crucial to acknowledge that not all fit this negative mold, and there are numerous property owners investing in blue-collar housing and making a positive difference in their communities. These responsible property owners deserve recognition for their efforts in providing their tenants with safe, sustainable, and equitable living conditions.
By providing families with access to affordable housing, real estate investment can help break the cycle of poverty and improve the quality of life in communities. Many property owners work with residents so they don’t need to be evicted by providing solutions such as flexible payment options and helping direct them to rental assistance and employment programs.
Real estate investment can further drive positive change by developing eco-friendly and sustainable buildings. By investing in energy-efficient and environmentally conscious structures, real estate investors can reduce the carbon footprint of communities, lower utility expenses for residents, conserve water, and improve air quality. This not only supports the effort against climate change but also makes communities more appealing to potential residents, resulting in economic growth and job creation.
Through investing in communities, real estate investors can create jobs, stimulate economic growth, and enhance the local environment. Doing so not only contributes to the well-being of their resident and the community at large, but we also reap the rewards of a more vibrant and thriving neighborhood.
Property owners can work hand-in-hand with residents, stakeholders, and local governments to revitalize and elevate multifamily communities by promoting community engagement and collaboration. Together, we can create safe, sustainable, and equitable neighborhoods for all.
Real Estate Investment as a Force for Good
It’s high time to embrace the potential for real estate investment to drive positive change. Let’s redirect our attention to the impactful contributions that property owners can have in our communities and strive towards a future where prosperity is shared, and communities flourish.
It’s crucial to acknowledge that there are indeed landlords who engage in unethical and harmful practices, but we should not paint all property owners with the same brush. The solution is not to demonize all property owners but rather to address the specific problematic behavior and hold those individuals accountable and I think that is exactly what the White House’s blueprint can do. It’s essential to strike a balance and not let the pendulum swing too far in the opposite direction.
I appreciate the work that was involved in creating the blueprint and I applaud the administration for taking the initiative to address these issues which are critical to providing housing security in our nation. We just need to make sure these principles are implemented in a way that is fair and equitable to all – not only the residents of the properties but the owners as well.