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Comment

Director Thompson,

My wife and I own 4 rental properties that we manage on our own in Albuquerque and Rio Rancho, New Mexico. I am also a licensed Real Estate Broker in the state of New Mexico. We have always priced our rents at competive rates and only increase them to cover rising costs. We evaluate prospective tenants on 4 criteria: credit scores, rental history, earnings to rent ratio, and employment stability. However, we have seen an increase in lease violations and more prominately the non-payment of rent due to liberal laws enacted by the state of New Mexico that give tenants more rights to violate the terms of the lease without the risk of eviction. This has caused us to rethink whether we want to continue to own rental properties because of these financial hardships. Rent controls will only exacerbate this problem. We are not alone on this issue as we have witnessed more and more property owners sell their rental properties which will only make the shortage of rental properties more acute and thus raise rental prices. I encourage FHFA to not impose rent control, but instead enact policies that will incentivize the supply of additional rental units by letting the free market operate effectively.

Thank you for the opportunity to respond to your Request for Input (RFI) on how the Federal Housing Finance Agency (FHFA), in its oversight of Fannie Mae and Freddie Mac, can best provide affordable housing opportunities for renters. Approximately 40% of the National Association of REALTORS®'s (NAR) 1.5 million members own at least one rental housing unit, playing a vital role in providing safe, quality, and affordable housing in neighborhoods nationwide.

As the FHFA examines ways to improve access to affordable housing, it is critical to acknowledge the most significant driver of housing unaffordability is the limited supply of available housing. According to NAR data, the United States has an underproduction gap of over 5.5 million units – a key underlying reason housing costs have increased. On top of this, inflation has increased the prices of goods and services for all Americans. As housing providers strive to provide affordable housing opportunities in their communities, they also contend with rising mortgage rates and increased costs for supplies, services, and maintenance. When inflation is high, the prices of materials increase. That means it becomes exceedingly more expensive for construction teams to build new homes or renovate existing ones. Ultimately, these high costs spill into the housing market and lift home prices for new builds and existing housing.

As REALTORS®, we are committed to upholding the very specific provisions of our contracts with residents, and we often go above and beyond what is required to ensure residents have safe, quality, and affordable places to live. Rental housing is a deeply complex issue that is unique to every community. Creating additional layers of policies to a space that is already heavily regulated by state and local governments will have severe unintended consequences for renters as housing providers are leaving the market in communities where affordable housing is sorely needed.

Affordable housing is pivotal to creating paths to upward mobility for people across the country. I appreciate your commitment to ensuring we achieve this goal without impeding the creation of much-needed housing supply. Manuel Gallegos