Rep. Grijalva of Arizona announced today his introduction, with 13 co-sponsors, of the Right to Rent Act of 2011 (H.R. 1548), which would allow families facing foreclosure to remain in their homes as renters paying the fair market rent.
Mr. Grijalva states:
Housing shouldn't be a politically charged issue -- this is a basic question of fixing a problem we can't ignore. Democrat, Republican or independent, we’re all here in Congress to represent our constituents and make sure the federal government is acting in their best interests. Right now, we can’t afford to pretend those interests are served by us doing nothing.
This closely follows a commentary in the Wall Street Journal by CEPR co-director Dean Baker, on how Right to Rent would ease the foreclosure mess. He points out that R2R would help struggling homeowners in 4 important ways:
First and foremost it provides housing security for homeowners who got caught up in the middle of the bubble... We were willing to give these banks trillions of dollars of loans at below market rates. Allowing foreclosed homeowners to stay in their homes as renters seems a rather small concession in comparison...
By changing the balance of power between lenders and homeowners, the right to rent provision would give lenders more incentive to voluntarily arrange modifications that allow homeowners to stay in their house as owners...
The fact that foreclosed homes remain occupied will prevent the sort of neighborhood blight that has devastated many communities across the country...
Finally, the right to rent could free up money that is currently going to mortgage payments on homes where owners never accrue any equity... The money saved by former homeowners is money they will spend in the communities where they live.
And last month, James Carr and Katherine Lucas-Smith of the National Community Reinvestment Coalition, an association of more than 600 community-based organizations that is a leading voice on housing issues, wrote in the Suffolk Law Review:
Finally, foreclosure must be eliminated as a trigger for eviction. This includes developing more extensive options for families who are unable to avoid foreclosures, such as enhanced rental option programs that allow struggling families to remain in their homes for at least a year as tenants rather than homeowners.
Dean Baker first introduced the concept of R2R in 2007, and Andrew Samwick (former Council of Economic Advisers chair for George W. Bush) quickly joined him in a joint op-ed. A year and a half ago, R2R got a flurry of attention from bloggers such as Ezra Klein and Felix Salmon when the Obama Administration, as well as Sen. Schumer and Sen. Durbin, indicated some support for the idea.
Could the third time be the charm for Right to Rent?