Comment Detail

Comment

AOA’s Input for FHFA
The Apartment Owners Association of California (AOA) provides rental forms and property management advice for over 20,000 housing providers in California. AOA strongly opposes national regulation of the rental housing market.

Do You Want to Create More Housing or Control More Housing?
By shielding tenants from eviction that should be evicted, you will definitely succeed in controlling more housing, and you will succeed in diminishing the current housing stock and discourage the creation of more units. This request for feedback is asking how we can regulate the housing industry more. However, the question that should be asked is, “How can more housing be created in the most efficient way? Our shared goal is to create more housing that is truly affordable. The question remains: how will we achieve it?

Lessons from History
It is essential to remember that government housing has historically had negative outcomes and has been associated with the creation of slums. The Section 8 program was established as a response to the failure of public housing. It is important to be mindful of these lessons from history and lead with caution. We must avoid creating an environment that perpetuates poverty by relying on public housing as the solution. Let's not recreate Cabrini Green on a national scale. Take caution! Will it be different this time? Can we really expect governmental controls and public housing to work? While it may seem like a good idea to have the government involved in housing, history has shown us that once the government steps in, housing stops being affordable. Prevailing wages, bureaucracy, lawyer's fees, and corruption are just some of the factors that make it difficult for the government to create affordable housing. The desire to do good is commendable, but the ability to provide housing efficiently is merely a dream with the government in the driver’s seat.

Right Person Right Seat (RPRS)
RPRS is a business management term: Right Person - Right Seat. The government is not suited to be a housing provider; it is in the wrong seat when it attempts to do so. Instead of one big slumlord called the U.S. Government, could hundreds of thousands of owners across the nation be a more suitable driver? If the government is in the driver's seat and they fail to do a proper job, then all renters across the country would be adversely impacted. Diversifying the ownership and management of rental properties is the same as diversifying an investment portfolio.

What Makes the Many Better than One?
In most cases an owner is better than a hired hand. What are rental property owners working for? They work for the equity in their property, often earning next to nothing. It's illegal to hire a government worker under such conditions. Therefore, there is a greater ability to keep the cost of providing housing lower.

When an owner is not a good landlord, building code, the lease, and other laws are already in place to protect tenants. Currently, bad landlords are already being held accountable when they fail to properly provide housing. However, government-run housing does not have the same level of accountability, to the detriment of who? To the detriment of the tenants.

Is Non-Profit Housing Housing Different from Public Housing?
Non-profit housing and public housing share many similarities, and non-profit housing is often not sustainable in the long run. The Skid Row Housing Trust serves as a prime example of this. Despite being a non-profit organization, it has not been successful in providing affordable housing. In fact, L.A.'s most prominent non-profit housing provider operates at a staggering $14 million annual deficit, while only managing to offer 2,000 units. Many of those units were purchased, not created. However, due to the high cost of maintaining older units and the financial losses incurred, the organization has resorted to adding newer buildings to its portfolio. Why perpetually run at a loss and drain the national budget like that? It might be a better idea to bolster Section 8 funding instead of wasting taxpayer dollars on non-profits that can’t operate as efficiently as real owners.

More Housing, More Efficiently
To solve the housing crisis, we need to create more housing, not just more rental units. The number of all types of housing needs to increase, ADUs, single-family homes, and multi-family. This can only be achieved by reducing the bureaucratic red tape involved in the permitting and building of new housing. Empower everyone to create more housing, more efficiently.

Pathways to the American Dream
There are viable investment models that aim to help renters become homeowners, which is a crucial component of the American dream. If you focus on creating pathways for people to achieve homeownership, you have the potential to become a success story and true national heroes.

Peanut Gallery or Heroes?
Skin Row Trust, the non-profit organization, failed to understand the costs associated with maintaining a property, just as tenant rights groups do not fully comprehend the complexities of managing housing. Criticizing from the sidelines, without understanding the challenges involved, is not productive. Instead, we should focus on creating various types of new housing, which is a crucial step in addressing the root causes of the housing crisis.

Undermining Basic Property Rights
There are 15 reasons why someone can be evicted, with four being no-fault and eleven being at-fault. All fifteen of these reasons are necessary to protect property rights; that’s why they are called “just-cause” evictions. Claiming that there are "loopholes" and calling certain evictions "unnecessary tenant removals" undermines the stability of the reasonable laws that we have in place. Do you want to control more housing or empower citizens to create more housing?

Respectfully,

Jeffrey Faller, President
Apartment Owners Association of California, Inc.