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Federal Policy

Section Overview

This section discusses federal policy areas that relate to housing equity. This is intended to help NMHC members understand how NMHC’s efforts at the federal policy level align with housing equity goals and the need to shape a better enabling environment for our industry to work toward more equitable outcomes.

There are various policy proposals that could help further racial and housing equity. In the policy realm, a combination of initiatives will be needed. Some of those policies endorsed by NMHC are set forth below. Enterprise has its own policy priorities, which are available here. This section reflects NMHC’s policy priorities.

There remains a large and influential role for the federal government to play in supporting the broader housing ecosystem and leveraging resources to drive better economic opportunity and outcomes in communities across the nation.

Federal housing policy has for too long exacerbated our nation’s housing challenges—from disincentivizing housing production to fostering a patchwork of overly complex, costly, duplicative and often counter-productive regulations.

For decades, the apartment industry has advocated on a wide range of issues that impact housing affordability, supply, stability, quality and ultimately housing equity. This Guide identifies opportunities for federal policymakers to address our nation’s housing challenges and, thereby, make meaningful progress in addressing the housing affordability, opportunity, stability and racial equity challenges that have plagued this country for decades. In addition to sustained and adequate funding for existing housing programs, the Guide recommends a number of reforms that will go a long way to removing barriers to housing production, operations and rehabilitation that today impede housing stability and economic mobility.

Policies that facilitate increasing housing supply, including affordable housing, can help drive much-needed private investment into multifamily housing and, in turn, into our communities. These investments also make good business sense to investors, developers, owners and operators of apartment housing who are working to meet surging demand for apartments. It will also support longtime industry initiatives to break down barriers to build in communities of all types.

The lessons learned from the COVID-19 pandemic provide an opportunity for housing stakeholders and policymakers to take a fresh look at our existing housing policies at the federal level to ensure that we are doing all we can to increase the supply and stability of our housing stock for all populations, but most importantly for low- and middle-income populations.

This section of the Guide identifies areas of federal policy with influence over housing affordability, opportunity, stability and racial equity. The following information is extensive but should not be considered conclusive. The federal policy landscape is fluid with new programmatic opportunities emerging regularly. Below are a number of key federal policy recommendations that work towards advancing housing equity. Stakeholders interested in leveraging federal public policy to advance housing equity or remain apprised of issues impacting the apartment industry should regularly check for relevant policy and political developments.

Addressing Our Nation’s Housing Challenges Is Essential to Promoting Economic Opportunity

The connection between economic opportunity and housing is well documented. Having a roof over one’s head and where it is located is the single most essential element impacting equity. Having access to decent housing impacts health, education, employment and a person’s ability to build individual wealth. Addressing our nation’s housing challenges, in general, and more specifically this nation’s housing affordability crisis, is crucial to promoting economic opportunity in our country. This is also an area where the federal government has significant potential in improving equity with an understanding that housing is the path to better opportunity in neighborhoods, with access to better schools, services, jobs and transportation.

Today’s housing supply is insufficient to meet our nation’s housing needs; and while we need housing at all price points, the most pressing is the need for housing available to low- and middle-income households. For decades, America has witnessed the escalating challenge created by demographic shifts, public policy decisions and economic factors culminating in the inability of families to rent, buy or maintain stable, affordable and safe homes.

Those at the lowest end of the income spectrum are especially vulnerable to these problems—more than one quarter of renter households (27.9 percent) earns less than $24,000 annually. For these households an affordable unit means one with a monthly rent of under $600. However, the number of low-cost units renting for less than $600 per month fell by 3.9 million between 2011 and 2019, reducing their share of the rental stock to just 22 percent. Housing for this population is also the hardest segment to build for without subsidy, given the costs associated with development. For many families, the shortage of rental housing that is affordable creates significant hurdles that make it even more difficult to pay for basic necessities like food and transportation. Ultimately, this also negatively impacts their future financial success.

However, housing affordability challenges are not unique to lower-income households. The total share of cost-burdened apartment households (those paying more than 30 percent of their income on housing) increased steadily from 42.4 percent in 1985 to 57.6 percent in 2021, while 31.0 percent paid more than half of their income on housing in 2021. Consider that the median asking rent for an apartment constructed in the first quarter of 2022 was $1,832. For a renter to afford one of those units at the 30 percent of income standard, they would need to earn at least $73,280 annually.

It is critical to remember that addressing housing equity and economic opportunity goes well beyond just taking action to improve housing affordability and increasing the supply of rental housing. It is only when these efforts are undertaken in concert with other work to improve all aspects of a household’s stability (housing stability, economic mobility, access to broadband, quality education, sufficient transportation and employment opportunities) that we can make significant progress. The following federal policy measures have the potential to positively impact this work.

[76] NMHC tabulations of 2021 American Community Survey microdata.

[77] Harvard Joint Center for Housing Studies, “America’s Rental Housing” (2022), available at

[78] (NMHC tabulations of 1985 American Housing Survey microdata, U.S. Census Bureau; 2021 American Housing Survey, U.S. Census Bureau.)

[79] (NMHC calculation based on U.S. Census Bureau)

Federal Programs that Improve Housing Affordability, Opportunity, Stability and Racial Equity

Sustaining funding for federal housing subsidies, affordability programs and reform of overly burdensome programs & regulations

Housing costs continue to grow, demand for rental housing continues to escalate, but incomes for many low-income families remain stagnant. Given these realities, demand for subsidized affordable housing has increased dramatically over the years and specifically during the COVID-19 pandemic. And while increases in the rental housing stock and addressing affordability are key long-term solutions, our nation needs critical investments in housing assistance to deliver immediate relief to American families.

However, for many years, federal funding for the primary programs serving low-income households has been virtually flat or declining. This has translated into waiting lists for support that can last years, pushes too many Americans into substandard housing that only exacerbates housing and racial inequities, and harms the economic potential of individuals and their overall communities.

For decades, the apartment industry has advocated for increased funding for critical programs that focus on housing affordability, such as the Section 8 Housing Choice Voucher Programs, Project Based Rental Assistance (PBRA), Rental Assistance Demonstration (RAD), Homelessness Programs, HOME and Community Development Block Grants (CDGB), the Housing Trust Fund, FHA Apartment Programs, Rural Housing Programs and others.

Programs like Section 8 and PBRA allow low-income families to rent market rate housing, taking advantage of the broad offering of privately owned and operated properties. Programs like HOME, CDBG, FHA Apartment and Rural Housing programs allow developers to address financing shortfalls often associated with affordable housing properties and stimulate meaningful development and preservation activity as a result. Homelessness Assistance Programs provide funding to serve individuals and families across the United States who are affected by homelessness; and Section 811 and 202 programs provide assistance for elderly and persons with disabilities.

In order to address housing affordability challenges for all Americans, significant and sustained increases in funding for these programs is essential. Congress, through recent economic stimulus and recovery packages, has done much to preserve and increase funding for many of these critically important subsidy programs. Sustained increases in funding for these critical programs will enable us to tackle homelessness, greatly reduce protracted Section 8 waiting lists and provide families and individuals with the kind of services and resources that can truly make a difference and hopefully effect meaningful changes in the stability and economic security of low- and middle-income families, especially BIPOC households.

Each of these programs must be freshly examined even as funds are disbursed to identify reforms that will ensure more efficient and effective ways to administer these programs and lead to better outcomes for the families and individuals they seek to serve.

Countless research pieces underscore the lasting impact of a community on a person’s economic and health outcomes and the indisputable benefits of living in areas that have lower poverty rates and access to good schools, reliable and affordable transportation networks and employment opportunities. Research by Raj Chetty, et al., estimated that the household incomes of children of Housing Choice Voucher holders who moved to high-opportunity communities at birth will increase by $214,000. However, too often, BIPOC families who wish to use a voucher to attain better housing in a neighborhood of their choice, whether in the community where they currently reside or in one they deem to be higher-opportunity, face difficulty and programmatic barriers.

There are multiple areas of needed reform, investment or expansion in existing federal programs:

Section 8 Housing Choice Voucher Program

The Section 8 Housing Choice Voucher program has long served as America's primary method for aiding 2.1 million low-income households with rental assistance. This program helps millions of Americans find homes in communities near good schools, jobs and transportation services, but reforms are needed to expand private industry participation. Funded by HUD and administered by local public housing authorities (PHAs), the program provides subsidized rents for qualifying low-income families in private rental housing, including apartments.

The program’s potential success is limited by too many inefficient and duplicative requirements, which discourage private housing providers from accepting vouchers. The program has also been plagued with a flawed and volatile funding system that has undermined private-sector confidence in the program. A U.S. Department of Housing and Urban Development (HUD)-funded study found that 68 percent of rental property owners in the study’s dataset who do not accept Section 8 voucher holders had, in fact, accepted them previously.

The program remains hamstrung despite previous Congressional and Administrative attempts at reform, and federal policymakers must again renew efforts to adopt common-sense reforms that could help control costs, improve the program for both residents and property owners, and increase private housing participation. These reforms must include:

  • Establishing a reliable funding system for administrators and property owners.

  • Providing financial incentives/participation bonuses to property owners in low-poverty areas.

  • Streamlining the property inspection process, especially for those units in buildings financed/inspected under other federal housing programs, such as LIHTC.

  • Helping renters with security deposit assistance.

  • Funding local PHA investment in on-staff property owner liaisons. According to Poverty & Race Research Action Council (PRRAC), support for property owners like this can often lead to greater participation.

  • Simplifying rent and income calculations.

  • Extending the contract term for project-based vouchers from 15 to 20 years.

Lawmakers must also reinforce the voluntary nature of the program. Congress explicitly made participation voluntary because of the regulatory burdens inherent in the program. However, state and local governments are enacting laws that make it illegal for a private owner to refuse to rent to a Section 8 voucher holder. Recent examples include “source of income discrimination” provisions passed by a number of cities. While often well intentioned, such mandates are self-defeating because they greatly diminish private-market investment and reduce the supply of affordable housing.

Rental Assistance Demonstration (RAD) Program.

The apartment industry has long supported RAD, which was established in 2011 as an affordable housing preservation strategy for public housing authorities (PHAs). The RAD program has done much to preserve and renovate existing housing affordability stock, but it needs additional funding.

RAD allows PHAs to convert public housing properties at risk of obsolescence or underfunding into project-based vouchers or rental assistance contracts under the Section 8 program by allowing them to leverage private capital to address capital needs. This enables housing authorities to work with private sector developers and managers to preserve their affordable housing stock. The HUD Section 202 and 811 programs are also able to participate in this type of conversion.

RAD is designed to reverse the trend of lost affordable units by accessing private capital to make up for related funding shortfalls. Congress should increase funding for this innovative program to prevent further public housing units from falling into obsolescence and protect the long-term housing stability of those who rely on this housing. Investments in RAD will leverage public-private partnerships to better protect the housing stability of the renters, of all backgrounds and improve outcomes across the board.

FHA Apartment Programs

FHA Apartment programs are an important source of capital supporting apartment construction and redevelopment.

FHA Apartment is best known for offering a source of construction debt to developers in addition to those offered by bank and other private construction capital sources. It also serves borrowers with long-term investment goals as the only capital provider to offer 35-40-year loan terms. FHA lending is essential to borrowers in secondary markets, borrowers with smaller balance sheets, new development entities, affordable housing developers and non-profit firms, all of which are often overlooked or underserved by private capital providers. It is important that FHA continues to be a credible and reliable source of construction and mortgage debt. FHA not only insures mortgages, but it also builds capacity in the market, providing developers with an effective source of construction and long-term mortgage capital. Federal policymakers should increase funding FHA’s Apartment Programs.

Community Reinvestment Act (CRA)

The Community Reinvestment Act was established in 1977 and provides guidelines for depositories activities in serving low- and moderate-income neighborhoods through providing loans, investment, deposits and other banking services. CRA has the potential to have a meaningful impact in improving housing equity and opportunity. But to achieve this goal, the regulatory framework needs modernization. Today’s banking system does not look anything like it did in 1977 or intermittent years where CRA was changed. Banking regulators have proposed a framework to modernize the approach to CRA. This important step to maintain CRAs focus on serving lower- and middle-income communities must:

  • Include greater incentives for banks to provide loans for apartment apartments that include middle-income housing.

  • Update the methodology for determining assessment areas (AA) which today neither reflects the current nor the future state of banking.

  • Update the guidelines regarding depository investment in the Low-Income Housing Tax Credit (LIHTC) program, in which banks invest heavily to meet CRA requirements.

Lastly, as policymakers look to reform the CRA, the three main banking regulators, the Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation should work in concert to finalize a new framework that is harmonized among the regulators, a reality that does not exist today given the separate approaches each has undertaken to date.

[80] (Chetty, et al., 2019)

Additional housing affordability, stability and other initiatives to expand housing access and improve equity

Land-Use Policy: Contribute Underutilized Land and Buildings

The Federal government should prioritize affordable housing when disposing of public land.

Land accounts for approximately 10 to 25 percent of an apartment project’s cost, and even more in high-cost areas. Developers also often struggle to find developable land in urban areas. Yet the federal government as well as many localities own underused or abandoned land or buildings that could be used for affordable housing.

Making good use of these lands and buildings requires strong public-private partnerships. The private sector contributes the investment dollars and expertise, and the government provides the land and helps facilitate a streamlined approval process. In the end, such partnerships produce affordable apartments while also boosting economic development. Policies like these have the potential to improve affordability, mobility and equity while improving the overall economic viability of entire communities.

Housing Stability Initiatives

Federal, state and local policymakers should work together to explore reforms of various housing policies that promote housing stability, including rental assistance programs and eviction mitigation. Evictions are an unfavorable outcome for all parties involved, but recent federal actions to regulate evictions and limit related data from being included in consumer screening reports reveal a misunderstanding of the true nature of the problem. They also ignore the myriad state and local policies that govern the eviction process.

Private, public and non-profit rental housing providers rely on the eviction process as their only legal remedy to recover possession of a unit to maintain the safety, peaceful enjoyment and successful operation of their communities. While most eviction complaints are premised on non-payment of rent, other causes include lease violations and criminal activity. This process is an essential property management tool and is needed to ensure the continued operational and financial health of a property.

Innovative policies can help residents avoid displacement from their current housing or find a housing solution that is right for them. Policies that provide and appropriately fund programs to assist residents facing financial hardships, like the Emergency Rental Assistance Program (ERAP), can protect renters and housing providers from unnecessary disruption and loss. ERAP could be more effective if resources were provided directly to housing providers to ensure they are used for their intended purpose. Property owners can also mitigate evictions by working with affected residents on payment solutions and flexible lease terms, and helping residents secure public and private rental assistance funds.

Given the complex nature of housing policies at the state and local level, federal policymakers should refrain from applying a one-size-fits-all approach; and instead look for ways to increase the supply of affordable housing and provide those families and individuals in need with the assistance that ensures they remain in stable housing. The appropriate federal role in evictions is leveraging federal dollars to help at-risk residents avoid eviction in the first place and boosting efforts to produce affordable housing options.

Fair Housing Rules

The apartment industry is committed to equal housing opportunity for all without regard to race, religion, color, sex, national origin, handicap or familial status. However, more guidance and clarity are needed from HUD on specific fair housing program areas, such as the applicability of disparate impact liability, accessibility and resident screening. The uncertainty surrounding these policies calls into question valid business practices used to ensure safe and decent housing for residents.

Recent administrations have actively expanded and/or altered various fair housing rules and policies. However, the resulting regulations and guidance have created uncertainty for housing providers and, in some instances, offer interpretations that differ from prevailing legal outcomes. Notably, HUD should align their disparate impact standards with the Supreme Court’s decision in Texas Department of Housing Communities Affairs v. The Inclusive Communities Project, Inc. The housing industry has long-raised concerns that the broad use of disparate impact theory could create liability for conducting ordinary and necessary business practices. While the opinion upheld the use of disparate impact liability under the FHA, the Court offered new analysis and limitations on the use of the theory that should be fully incorporated in HUD’s rules and guidance.

As HUD and federal policy makers continue to look at the Disparate Impact Rule, HUD must ensure their interpretation of disparate impact liability is compatible with the Supreme Court’s rulings on the matter. Policymakers should also ensure that guidance exists to help housing providers execute necessary business practices without running afoul of fair housing requirements.

Leveling the playing field for renters on access to credit: encourage adoption of alternative credit models

Apartment owners and operators have long called for policymakers and the consumer reporting industry, together, to better enable renters the ability to build a financial profile that allows them to attain the many associated benefits. Historically, credit reporting agencies have not captured a complete picture of the financial performance of renters.

Existing credit scoring models, like FICO Classic, which drive approvals, interest rates and other terms of apartment leases, car loans, insurance products, home mortgages and other financial products often do not accurately reflect the creditworthiness of renters. While more credit reporting agencies and central data aggregators are collecting alternative data such as rental payments, medical payments, utility payments and other payment records, more needs to be done by policymakers and regulators to increase adoption.

The impact of using static and limited financial data to determine someone’s creditworthiness and overall financial stability disproportionately impacts BIPOC communities. According to the Urban Institute, “as of October 2020, 31.5 percent of Hispanic/Latine consumers and 45.1 percent of Black consumers had subprime credit scores, but only 18.3 percent of white borrowers did. Using alternative data could provide an on-ramp that could allow many of these consumers to improve their credit prospects. evThese data could enable credit scoring for more than 50 million currently unscoreable consumers and raise credit scores for those with thin files.”

Apartment living now attracts a wide variety of Americans and will continue to do so, making it all the more important that credit reports and scoring models are modernized and adopted so as not to prevent our nations renters from being put at a financial disadvantage. The federal government should promote voluntary policies that give people flexibility to build wealth without owning real estate and through incentivized savings. Federal regulators, with the support of Congress, should continue to push for greater adoption of alternative credit scoring models that better enable renters to build a financial and credit profile that more accurately portrays their fiscal stability.

In advocating for policy changes to increase the use of rental payment data, policymakers should understand the full legal and risk landscape surrounding rental reporting that property owners face. NMHC’s 2022 White Paper - "Renter Payment Reporting: Considerations for Rental Housing Operators,” is a great resource to help policymakers explore the issue.

[82] (Kaul, 2021)

Utilizing tax policy to support housing equity goals

Retain & expand pro-development tax policies that incentivize investment in rental housing at all price points. Congress should consider enacting the following tax proposals that would have a significant impact on addressing housing affordability:

  • Expand the Low-Income Housing Tax Credit: The Low-Income Housing Tax Credit (LIHTC) is a public/private partnership that leverages federal dollars with private investment to produce affordable rental housing and stimulate new economic development in many communities. Since its inception in 1986, the LIHTC program has financed 3.74 million apartments and served 8.06 million households. The LIHTC program provides critical support to the nation's affordable housing production. Given that 11.6 million renter households spend more than half their income on rent, lawmakers should strengthen the program by significantly augmenting credit authority to spur critical housing production.

  • Create a Middle-Income Housing Tax Credit: Build on the success of LIHTC and complement its work by establishing a Middle-Income Housing Tax Credit (MIHTC), which would spur the production of apartment rental homes for America’s working families. This type of production would address housing shortages for populations who don’t qualify for any type of housing subsidy but who struggle to afford their living expenses.

  • Enhance Opportunity Zones to Incentivize Rehabilitation of Housing Units: The Opportunity Zones program has been beneficial in spurring economic activity, but its structure can pose challenges for its use to preserve and rehabilitate existing apartment housing. The program could be improved to incentivize the rehabilitation of existing apartment units by reducing the basis increase necessary to qualify an apartment rehabilitation project for Opportunity Zone purposes. This change could be impactful in preventing displacement in transitioning communities.

  • Encourage the Adaptive Reuse of Underutilized Commercial Properties into Apartment Housing: With the COVID-19 pandemic modifying where Americans work and shop on a likely permanent basis, the apartment industry believes there is great promise in proposals to convert underutilized properties (e.g., office buildings, shopping centers, and hotels) into apartment housing. Congress should look to provide a federal tax credit to convert office buildings into other uses, including residential and ensure that all types of commercial properties (e.g., shopping centers and hotels) qualify for the tax incentive, as well as to ensure REITs could utilize the benefit.

Meeting housing demand and improving equity via housing finance reform

Federal policymakers must recognize that any discussion of housing finance reform is inherently a discussion of housing affordability. Getting housing finance reform right is a critical component to addressing housing affordability for all income levels. Any housing finance reform effort must recognize apartment housing’s unique characteristics; Fannie Mae and Freddie Mac’s (the GSEs) apartment businesses are important providers of debt capital for the apartment industry.

The GSEs serve all markets and all income levels and have been particularly effective at providing capital to apartment properties that serve low- and middle-income renters. For over a decade, more than 80 percent of their business has served that class of renters. Preservation of the mortgage liquidity currently provided by the GSEs in all markets during all economic cycles is critical. The goals of a reformed housing finance system should be to:

  • Maintain an explicit federal guarantee that apartment-backed mortgage securities will be available in all markets at all times.

  • Ensure that the apartment sector is treated in a way that recognizes the inherent differences between the apartment and single-family businesses.

  • Retain the successful components of the existing apartment programs in whatever succeeds them.

These principles can be achieved through a reformed structure that preserves the high quality and value of the current apartment secondary mortgage market’s activities.

Supporting equitable and resilient communities by reauthorizing and reforming of the National Flood Insurance Program

BIPOC communities are often the most impacted by devastating flooding events. Within these communities, low-income residents of affordable housing or smaller rental properties can be disproportionately impacted as the current structure of federal flood resiliency and mitigation efforts is directed elsewhere. As the NAACP has noted, significant work must be done at the federal level to ensure more equitable disaster recovery and resiliency efforts are deployed across the country. Below are areas where support of federal policymakers is needed in improving flood preparedness, insurance and mitigation efforts in flood prone areas, which have the potential to significantly improve housing affordability, opportunity, stability and racial equity.

Flood Insurance

Floods are the most common natural disaster in the United States. The National Flood Insurance Program (NFIP) ensures that affordable flood insurance is available at all times, in all market conditions for every at-risk rental property. These include more than just high-rise apartment properties in urban centers and extend across every state to include rental homes of all sizes and types. Federal policymakers must work to ensure that all rental properties continue to have access to affordable, quality flood insurance through the NFIP to not only lessen taxpayer risk in the wake of a flooding event but to also help manage the increasing costs of operating housing that is affordable.

Congress must also look for ways to ensure that the NFIP remains attainable and affordable to all rental property owners. As Congress and other federal policymakers look to reauthorize and reform the NFIP, they should:

  • Provide for a long-term reauthorization of the program to create market certainty that allows the apartment industry to meet soaring rental housing demand.

  • Expand the NFIP to include Business Interruption coverage for rental properties.

  • Allow for NFIP blanket coverage for owners who own several rental housing properties or garden style communities.

  • Provide Replacement Cost Value (RCV) instead of Actual Cost Value (ACV) to damaged apartment properties.

  • Ensure that all rental properties continue to have access to affordable, quality flood insurance through the NFIP and federal mitigation and resiliency resources should be a top priority for Congress and federal policymakers in their efforts to improve housing and racial equity.

Flood Mitigation

FEMA (Federal Emergency Management Agency) currently administers several mitigation grant programs to reduce damage, claims, and overall risk in the event of a natural disaster such as flooding. While apartment communities are not explicitly excluded from eligibility for existing FEMA funds, the grant programs are overwhelmingly focused on primary, single-family homes. FEMA has only recently focused attention on the importance of mitigation efforts for properties that cannot benefit from traditional mitigation techniques like building elevation.

Unfortunately, many of the recommendations for alternative methods of mitigation that FEMA has made to property owners are impractical for apartment communities and the majority would not afford any flood insurance premium reduction despite the large cost of implementation. This leaves mitigation out of reach for most small, affordable property owners in flood prone areas.

As Congress and federal policymakers look at improving our nation’s flood resiliency as part of NFIP reform and in other areas, they should:

  • Require FEMA to undertake further actuarial work and issue alternative mitigation guidance specific to apartment property owners that is both realistic, cost effective and would result in premium reductions under the NFIP.

  • Expressly authorize small businesses and apartment firms to be eligible for existing mitigation programs or consider establishing an apartment and commercial property specific mitigation grant program to address the unique challenges faced by these property owners.

[83] (FEMA, 2015)

Bridging the digital divide

Millions of Americans have had to face the reality of home schooling and teleworking daily as remote learning and working become more commonplace. The reality of this new hyper-connected environment has laid bare challenges many families still face in gaining access to the internet at home.

In urban or suburban low-income and workforce housing communities where broadband service often does exist, adoption can be hindered by affordability and the quality and reliability of that service. In all too many cases, low and middle-income renters are faced with the choice of using limited funds, even with subsidies, to pay for broadband service that is slow, unreliable, and unable to support modern demands such as e-learning, remote work or video streaming.

Significant investments and upgrades are needed to improve the reliability and quality of the broadband service at low-income and middle-income rental properties. Housing owners and operators of affordable units are often small firms or individual owners operating with little-to-no profit margin and must provide essential services such as property maintenance, security, etc. The result of these financial hurdles, coupled with a lack of financial investment by most broadband providers, is subpar and dated infrastructure, like aging copper wire installed decades ago, remaining in place and unable to meet current and future needs.

Congress, as part of the recently enacted Infrastructure Investment and Jobs Act (IIJA) took a significant step in trying to end the digital divide in unserved and underserved communities across the country in establishing the Broadband Equity, Access, and Deployment Program (BEAD). In total, $42.5 billion in federal funding will be distributed through state and local broadband offices to bring broadband service to places where it doesn’t exist today or in locations considered underserved (inadequate or obsolete service). Low-income apartment communities or those with a high percentage of unserved residents were made eligible to receive broadband deployment funding by Congress and the National Telecommunications and Information Administration (NTIA) has reaffirmed this eligibility. Each state is in the process, now, of building out their own individual programs and establishing criteria that build upon federal priorities and requirements. It is critical that state officials maintain the priority set by Congress in ensuring apartment communities remain eligible as they begin to set their own criteria for deployment, or risk leaving millions of American families unconnected from the promise of the internet.

Connecting the Dots…Leveraging Federal Policy and Resources to Address Local Barriers to Development

It will require close collaboration between policymakers and housing stakeholders at all levels—state, local and federal— to work together to make meaningful progress on addressing housing affordability, opportunity, stability and racial equity, creating greater opportunities for low- and moderate-income Americans and increasing our housing supply.

An area of increasing federal review is the impact of state and local regulation that can encumber or hinder the development of housing. Local regulations, even those that are well intended, are often antiquated, onerous and cumbersome. In addition, they often increase development costs across the board and, in some cases, prevent development altogether. And while these are barriers that exist at the state and local level, there is much that federal policymakers can do to incentivize the removal of costly policies that serve to deter and prevent building and preserving much needed housing and providing economic opportunities to low- and middle-income populations.

The need for action at the federal level is clear. In a speech before the Urban Institute in November 2015, Jason Furman, former chairman of The White House Council of Economic Advisers, said that the U.S. could build a lot more apartments but noted “apartment housing units are the form of housing supply that is most often the target of regulation.”

A study by NMHC and the National Association of Home Builders (NAHB) based on responses from a variety of apartment developers throughout the country found that on average, regulation imposed by all levels of government accounts for an average of 40.6 percent of apartment development costs.

There are some common barriers to housing development at the state and local level that are often responsible for increasing per unit costs or, in some cases, make affordable housing development and preservation impossible, worsening the housing inequities we face across the nation. They can range from opposition from local residents (otherwise known as NIMBYism) to discriminatory or antiquated zoning laws, to onerous and extended entitlement requirements, to high impact and linkage fees, and even outdated parking requirements. These are also the types of housing policies that federal resources and policy can aim to address, some of which are also addressed in the State and Local Policy section of this Guide.

Again, while the barriers to housing production and preservation listed above are primarily within the purview of local governments, federal policymakers can play a role by creating incentives for local leaders to reduce barriers and adopt policies that encourage private sector investment in housing. For example, priority or greater access to federal housing, transportation and health funding can be provided to states and localities who remove barriers to housing production, streamline their entitlement processes and make building affordable housing a priority in their communities.

Examples of actions that the federal government should incentivize at the local level include:

  • Deferring taxes and other fees for certain apartment development.

  • Making available underutilized land.

  • Streamlining the development and approval processes with fast-tracking programs.

  • Adopting by-right zoning for apartment development.

  • Reducing parking and other land requirements.

  • Establishing density bonuses.

  • Enacting separate rehabilitation codes.

  • Creating an efficient public engagement process and reducing the influence of NIMBYism.

  • Using property tax abatements.

  • Restricting the use of counter-productive housing policies like rent control and mandatory inclusionary zoning that deter housing investment by the private sector.

In recent years, the Obama, Trump and Biden Administrations have all worked to adopt this type of posture in both encouraging better state and local housing planning and support while dedicating federal resources to aid in those efforts. Congress, too, has seen significant bipartisan work done in advocating for the same, with the introduction of legislation such as the Housing is Infrastructure Act, the Yes in My Backyard Act, the Housing Supply and Affordability Act and the Build More Housing Near Transit Act. These proposals represent the kinds of strategies needed to remove barriers to construction of affordable housing and rental housing.

Without sustained action at the federal level, the combination of local housing affordability mandates, regulations, and NIMBYism can lead to a complex, duplicative and costly regulatory landscape that can drive up the costs of apartment housing development and exacerbate our nation’s housing affordability, opportunity, stability and racial equity challenges.

[84] (Emrath & Walter, 2022)


These recommendations are intended to provide a roadmap for federal policymakers to improve economic inclusion, economic mobility and opportunity in communities across the country. Changing demographics and the growing demand for rental housing indicate that policymakers and industry stakeholders must affect the changes that are needed to meet the diverse needs of renters.

The goal of this work is not just to improve individual economic opportunity, but to improve and expand our economy. This will allow our communities to seize lost economic opportunity, develop safe, quality housing in communities that desperately need improved housing stock and provide our nation’s renters with housing stability and the prospect of long-term economic mobility and prosperity.

Having a roof over one’s head and where that roof is located are the most essential elements impacting equity.

Housing impacts health, education, employment and a person’s ability to build individual wealth. Addressing our nation’s housing challenges, in general, and more specifically this nation’s housing affordability crisis is crucial to addressing economic inequities in our country. It is only when efforts are undertaken to address affordability while also working towards increasing housing supply at all price points, reducing housing instability, expanding housing assistance and removing antiquated and discriminatory zoning and land-use policies from use can housing be the path to greater opportunity that we need it to be.

As with the state and local policy section of this Guide, there are other federal policy areas that impact housing and racial equity. These range from improving transportation networks, ensuring our communities are safe and secure, providing improved access to high-quality health care, ensuring food security and improving access to a quality education.

Bringing together policymakers, housing advocates and industry professionals alike will best ensure we can increase housing supply and advance housing equity for all.

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