The midterm election results will likely shape national housing policy going forward, and more change is coming at a state level. Last week, voters around the country weighed in on a variety of proposals with implications for the rental industry, including funding, zoning, tax and permitting measures.
Affordability was the defining issue for voters, according to Nicole Upano, assistant vice president of housing policy and regulatory affairs for the National Apartment Association, and “there were significant wins in terms of bonds and other solutions that will help drive and boost more housing supply.”
Going forward, “we're continuing to keep an eye on the other measures that are imposing greater rent regulations,” Upano told Multifamily Dive. NAA will be watching “how legislators, legislatures and local councils will be shaping these measures and how they'll ultimately impact rental housing in those communities.”
Here’s how state-level housing ballot measures impacting the multifamily industry fared.
California
Proposition 1: Authorizes bonds for housing affordability programs
Status: Passed
Voters approved $11.25 billion in bonds for affordable housing programs, per Ballotpedia. $1.25 billion is set aside for veteran housing initiatives with the other $10 billion for California’s Multifamily Housing Program, the CalHome Program and other income-qualified state housing initiatives. Of that, $7.2 billion will support affordable multifamily housing programs, per NAA.
“We're thrilled to see that Prop. 1 was passed by the voters in California. It could support up to 40,000 multifamily units, according to the Legislative Services Office,” Upano said. “It's a huge victory for California's renters, and will help make a significant dent in the housing affordability challenges that folks are experiencing.”
Proposition 45: Modifies environmental review for certain projects
Status: Defeated
A proposal to amend the California Environmental Quality Act and the Permit Streamlining Act to speed up the review process for projects deemed essential, including housing, was narrowly defeated, according to Ballotpedia. The proposal would establish deadlines for permit decisions and reduce the scope of legal challenges that courts can consider.
“This would have built upon changes that happened at the federal level in the 21st Century ROAD to Housing Act to improve the federal environmental requirements,” Upano said. “It's unfortunate that it didn't pass.”
Florida
Amendment 3: Lowers the non-homestead assessment cap
Status: Passed
Florida voters passed an amendment that lowers the cap on how much the assessed value of non-homestead properties, such as apartment buildings, can increase each year, according to Ballotpedia. The annual allowable increase dropped from 10% to 5%.
The measure could help “alleviate property tax burdens on multifamily owners,” Joel Berner, senior economist at Realtor.com, told Multifamily Dive in emailed comments.
Upano said that decreasing non-homestead property assessed values is helpful, “but we're keeping a close eye on how city and county officials use creative solutions to make up for those shortfalls, which can come in the form of increased taxes or fees for housing providers.”
Hawaii
Question 2: Housing infrastructure growth bonds
Status: Passed
Voters overwhelmingly authorized counties and municipalities to issue Resilient Infrastructure for Shelter and Equity Bonds for housing development and other public works projects, according to Ballotpedia. Local governments can repay the bonds through future growth in property tax revenues, as opposed to real property tax rates with debt limits.
The measure gives municipalities “this broad power to help address communities' specific needs,” Upano said. “This is one again where we see great benefit in how this adds on to the 21st Century ROAD to Housing Act to increase development in the state.”
Massachusetts
Question 7: Limit on required lot size for single-family homes
Status: Defeated
This state measure would have required jurisdictions to allow single-family homes on smaller residentially zoned lots, preempting local zoning authority. Advocates said Massachusetts’ large minimum lot size requirements make homes more expensive and scarce. The measure was narrowly rejected, according to Ballotpedia.
“We were grateful that Massachusetts did not consider reinstituting rent control,” Upano said. “It's unfortunate that some of these other policy solutions that could help with infill and provide more housing options for families in Massachusetts didn't pass.”
North Carolina
Property Tax Levy Limit Amendment
Status: Passed
Voters approved a measure amending the state constitution to require the state legislature to pass laws limiting how much local governments can increase property taxes, per Ballotpedia.
While this is helpful for housing providers, “you have to look at, how will this impact local governments?” Upano said. “Will they be looking for creative ways to make up for those shortfalls in their revenue that may be a result of these limitations?”
Rhode Island
Question 2: Housing Development Bond Measure
Status: Passed
More than 61% of voters approved $120 million in bonds for projects that build and preserve affordable housing in Rhode Island, per Ballotpedia. At least $25 million will be allocated for housing intended for homeownership, and another $10 million can go toward public housing development.
“We're thankful that this measure passed,” Upano said. “Affordability remains the defining issue for voters, and so this will be a huge victory for households in Rhode Island to have more housing available.”
Tennessee
Amendment 2: Prohibits the Legislature from imposing a state property tax on real, personal or mixed property
Status: Passed
Voters approved a measure that bars the Tennessee General Assembly from establishing a state property tax, according to Ballotpedia. The state did not previously have such a tax, but now the General Assembly is prohibited from levying one unless the state constitution is amended again. Local governments are still allowed to charge taxes.
Similar to the other tax measures that passed, Upano urged caution about how that potential revenue could be recouped.
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