Policy Issues
As the leading voice for commercial and multifamily residential real estate in the Washington metropolitan region, AOBA works to ensure public policy helps maintain a vibrant and healthy real estate industry. This includes a wide array of policy topics, such as landlord-tenant law, operations, development, energy efficiency, and electrification. See below for a list and description of various policies and AOBA's position.
Bed Bugs
Overview: Given their rapid proliferation without proper treatment, bed bugs have the potential to spread throughout an apartment community. While bedbugs do not transmit disease, infestations are highly disruptive to residents and property management staff. Absent cooperation from residents in identifying potential outbreaks and allowing access to their apartment homes for remediation, bedbug infestations will spread, disrupting other residents and creating significant financial and administrative burdens for property management.
AOBA Position: Given that bed bugs are often introduced to apartments by residents, most commonly via old furniture or suitcases, any legislative action should properly balance responsibility for identification, notification, preventive action, and remediation between residents and property management.
Building Energy Performance Standards
Overview: Building Energy Performance Standards, colloquially known as BEPS, is a legislative and regulatory tool employed by state and local governments to increase energy efficiency, decrease greenhouse gas emissions, and promote the use of renewable energy in buildings. BEPS are typically part of a broader set of policy tools implemented to help achieve climate goals.
BEPS set a minimum threshold for energy performance of existing buildings and require them to hit various benchmarks by reducing emissions and increasing efficiency over time at regular intervals. Buildings are required to benchmark and track their energy output using a platform like Energy Star Portfolio Manager and then perform various types of building upgrades and retrofits to comply.
AOBA Position: AOBA generally supports efforts to reduce greenhouse gas emissions and increase the energy efficiency of buildings. The real estate industry has made significant strides in this regard over the past two decades.
However, the association cautions policymakers against mandating aggressive energy reduction targets on short timelines. Mandating targets that are too aggressive forces expensive retrofits that may not make economic sense and conflict with housing affordability goals. Likewise, given the significant financial headwinds facing office building owners, many buildings may not be capable of complying absent significant subsidy.
Building Codes
Overview: Building codes establish minimum standards for the design, construction, alteration, and maintenance of commercial and multifamily real estate. Model codes and standards are developed and published by independent organizations, including the International Code Council (ICC), National Fire Protection Association (NFPA), and the American Society of Heating, Refrigerating, and the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE), which are then taken up in whole or in part by states on various timetables.
AOBA Position: AOBA supports cost-effective and technologically feasible improvements to building safety, performance, operational efficiency, and sustainability. However, changes to these standards, especially for existing buildings, must balance these aspects with the need to preserve the affordability of rental housing and minimize excessive burdens on commercial office buildings struggling in a post-pandemic environment.
Electrification
Overview: Jurisdictions in the Washington DC metropolitan region are seeking to aggressively transition from fossil fuel power generation to electric power as part of their climate goals. Policies that flow from this desire to transition to cleaner energy source generation have tended to be inflexible, pushing for a transition that is far too aggressive given that only 6% of electricity is currently produced by renewables in the mid-Atlantic region.
AOBA Position: AOBA supports efforts to reduce our community’s greenhouse gas emissions and, to that end, our reliance on fossil fuels for energy supply. However, policymakers should take a methodical approach when considering climate policies. Any transition away from fossil fuel generation must be managed in a well-informed and sufficiently flexible manner to address technological and design limitations, ensure that incurred costs are prudent, maintains the economic viability of utility services in a way that is affordable for ratepayers, and optimizes the overall economic performance of jurisdictions in the region.
Eviction
Overview: Eviction is the final step in a lengthy legal process that starts with a notice of nonpayment of rent or lease violation and is unfortunately a necessary part of doing business. Rental housing providers engage in the eviction process as a last resort, as every incentive exists to resolve issues and work with residents to keep them housed. It is the sole legal remedy available to remove a resident who has breached the lease agreement and lawfully regain possession of an apartment, and is crucial in cases involving violent conduct, illegal activity, or threats against other residents and staff.
AOBA Position: AOBA opposes changes to eviction laws that impede a housing provider’s ability manage risks and maintain the safety and security of apartment communities. Housing providers must protect other community residents and fulfill financial obligations regardless of whether a resident upholds their lease agreement.
How Multifamily Properties Are Financed
Rental housing serves an essential role in the viability of a community. It represents the most affordable type of housing and is critical to accommodating the workforce that fuels our local economy. Yet our region suffers from an extreme undersupply of housing. According to the Metropolitan Washington Council of Governments, we need to add 320,000 new units of housing by 2030 just to keep pace with demand.
To understand how we can create a hospitable environment to attract new housing production to our community, it is important to understand who investors are and how multifamily projects are financed.
Inclusionary Zoning
Overview: Inclusionary Zoning (IZ) is a housing policy that attempts to facilitate the construction of mixed income apartment communities by requiring a certain number of units in new construction be set aside for low-income households based on Area Median Income levels (AMI). IZ policies typically fall under two types: voluntary policies that offer incentives such as density bonuses in exchange for a certain percentage of below market units, and mandatory programs that stipulate a percentage of units held below market rents as a condition of a project’s approval.
However, this distinction is ultimately misleading, as all inclusionary zoning is voluntary in practice. Constructing multifamily properties is an investment that requires capital, and no market rate or affordable housing developer will choose to make an investment that cannot achieve an acceptable rate of return.
AOBA Position: Inclusionary Zoning can be a valuable tool to produce affordable housing depending on the program’s design, the strength of the real estate market where IZ is in effect, and the level of public subsidy or incentives offered. Failing to balance these considerations properly results in little to no affordable housing production.
Public Safety
Public safety has become a major concern for residents and businesses in the Washington, DC metropolitan area, and AOBA members are no exception. In response, AOBA staff have created a web form where property management and tenants of member companies can report public safety incidents directly to AOBA. Each submission will bolster AOBA's advocacy efforts with legislators and policymakers across the region on this issue.
If you have any questions about this form, please contact AOBA's Director of Policy Communications, Alexander Rossello.
Rent Control
Overview: Rent Control limits the amount providers of market-rate housing can increase rents upon lease renewal. The policy has many aliases, including rent stabilization, rent freeze, rent caps, and anti-rent gouging, and tends to be accompanied by burdensome and complex regulatory schemes.
AOBA Position: AOBA opposes any form of rent control. Decades of empirical research show this well-intended but ill-advised approach has a clearly established track record of compounding a community's housing affordability issues. Rent control does not create or facilitate the construction of new housing supply or make existing units affordable. Instead, it deters investment in new and existing multifamily housing while forcing housing providers to defer maintenance, reducing the quality of a community's housing stock. Nor are rent controlled apartments restricted to low-income households, meaning individuals of any income level can rent them.
Resident Screening
Overview: Resident screening is a crucial aspect of operating rental housing. Housing providers screen applicants to determine their ability to meet the financial obligations of a lease and ensure the safety and security of their apartment communities. Comprehensive screening processes assist housing providers in managing the risk of lease default while protecting renters from getting in over their heads financially, facing potential displacement, and incurring adverse marks on their rental histories.
Screening decisions are made based on a combination of factors. Approximately 14 to 33 variables contribute to a comprehensive and legally compliant screening process. These include employment history, income verification, criminal background check, credit history, delinquencies, collection accounts, bankruptcies, foreclosures, vehicle repossessions, liens, credit scores, and rental history. These variables together help gauge the ability of an applicant to meet financial obligations and comply with the terms of the lease agreement.
AOBA Position: Resident screening is a vital risk management process for housing providers that is highly regulated at the Federal level by the Fair Credit Reporting Act and the Fair Housing Act. Policies restricting the use of certain variables, such as rental histories, result in a greater reliance on income and credit profiles, which disproportionately affect lower-income renters with bad credit or who are credit invisible.