Treasury Warns Congress on Dangers of Defaulting
Last week, Secretary of the Treasury Janet Yellen sent a letter to all members of Congressional leadership informing them that the outstanding debt of the United States would reach the statutory limit on Thursday, January 19th. Since Thursday, Treasury has started taking certain extraordinary measures to prevent the United States from defaulting on its obligations. The period of time that extraordinary measures may last is subject to considerable uncertainty due to a variety of factors, including the challenges of forecasting the payments and receipts of the U.S. government months into the future. While Treasury is not currently able to provide an estimate of how long extraordinary measures will enable us to continue to pay the government’s obligations, it is unlikely that cash and extraordinary measures will be exhausted before early June. Fears of a default have prompted Congress to pass legislation to raise or suspend the limit every time, most recently in December 2021.
Sen. Warren, Rep. Bowman Seek to Curb Rising Rent and Home Prices
On January 9th, Senator Elizabeth Warren (D-MA), a member of the Senate Banking, Housing, and Urban Affairs Committee, sent a letter to the CEOs of three private equity-backed firms—Progress Residential, American Homes 4 Rent, and Invitation Homes —calling out their growing activity in the housing market that has resulted in rent hikes and unaffordable homes for first-time buyers. In the letter, Senator Warren asks the CEOs to provide detailed information about their business practices to determine whether they have been taking advantage of the housing shortage to pad their pockets while raising housing costs, hiking up fees, and evicting Americans during the pandemic. “Private equity firms and rich investors have been taking advantage of the housing shortage by purchasing large numbers of houses and raising rents for families, all to pad their bottom line. With record investor activity in the housing market, these firms need to answer for their business practices that shut Americans out of homeownership and strain their pocketbooks with rapidly rising rental costs. We can’t solve the housing affordability crisis, and lower housing costs for consumers, unless we crack down on predatory practices by Wall Street investors. ” said Sen. Warren.
On the same day, Representative Jamaal Bowman (D-NY) and Sen. Warren sent an additional letter to the White House urging President Biden to take executive action to address the rising cost of rent, end corporate price gouging in real estate, and ensure renters and people experiencing homelessness have safe, stable housing. Sen. Warren and Rep. Bowman requested the Biden Administration to supplement pre-existing efforts with actions that support tenants and address the issue of rent inflation and corporate price gouging in the rental market, including:
- Directing the Federal Housing Finance Agency (FHFA) to establish renter protections for individuals residing in properties financed with government-backed mortgage properties, including anti-price gouging protections, just cause eviction standards, habitability standards, and protections against source-of-income discrimination. To prevent future abusive landlord practices, FHFA must enforce these standards and make public any steps it takes to hold landlords accountable.
- Directing the Federal Trade Commission to issue new regulation defining excessive rent increases as a practice that unfairly affects commerce and enforce action against unfair rent gouging practices.
- Directing the HUD to issue guidance to entitlement jurisdictions on the importance of mitigating cost burden and adopting anti-rent gouging measures as an important action for affirmatively furthering fair housing to ensure equal access to fair and affordable housing for all renters.
- Encouraging the Consumer Financial Protection Bureau, in conjunction with the Department of Justice and HUD, to investigate instances of corporate landlords discriminating against tenants unlawfully.
- Encouraging states to use State and Local Fiscal Recovery Funds from the American Rescue Plan to protect renters from the threat of rent inflation and corporate greed in the rental market by investing in homes affordable to people with the lowest incomes, as well as extending and strengthening emergency rental assistance programs. The Administration should also encourage states and localities to enact much-needed renter protections. U.S. Government Accountability Office. (2020). Better HUD oversight of data collection could improve estimates of homeless population. GAO-20-433. Retrieved from: https://www.gao.gov/products/gao-20- 433 6 According to the U.S. Census Bureau, nearly 7.4 million renters reported that they were behind on their rental payments as of November 14.
- Activating Federal Emergency Management Agency resources to help move people experiencing homelessness into permanent, affordable homes and provide longer-term rental assistance to help keep renters stably housed.
- Establishing a Federal Interagency Council on Tenants’ Rights to identify interagency actions that can be taken to support renters; coordinate the implementation of policies to protect tenants; and engage renters in underserved communities in policy making efforts.
Sen. Warren and Rep. Bowman acknowledged that, in addition to requesting more proactive efforts by the White House, there is an urgent need for Congress to pursue legislation on the issues of tenant protections and unaffordable housing costs, including the momentous investments in affordable housing included in last year’s the House-passed Build Back Better Act. NAHMA will continue to monitor this closely.