Hefty lefties

Bernie Sanders, Elizabeth Warren, AOC and others propose progressive housing policies that rile real estate — and would cost the industry big time

Oct.October 01, 2019 11:00 AM

Alexandria Ocasio-Cortez, Bernie Sanders and Elizabeth Warren

Just a few months after New York passed historic reforms that infuriated landlords and thrilled tenants — with California following suit — several Congress members and presidential candidates are throwing their weight behind even more aggressive proposals.

Mostly promoted by Democrats on the far left, those policies include the mid-September doozy from U.S. Sen. Bernie Sanders calling for nationwide rent control under his $2.5 trillion housing plan. Despite more than two dozen states prohibiting limits on what landlords can charge, Sanders wants to cap annual rent increases around the country at 3 percent, or 1.5 times the consumer price index, whichever is higher.

Sen. Elizabeth Warren, who’s also gunning for the White House, has a slightly less contentious proposal: adding more supply to help lower prices in the rental housing market. But Warren hopes to build millions of new apartments with tax hikes on the wealthy, and her call to relax zoning rules for more construction could rankle rich and poor alike.

Rep. Alexandria Ocasio-Cortez, the first-term congresswoman who represents parts of the Bronx and Queens, is another high-profile politico with lofty goals.

Ocasio-Cortez recently took aim at “market-controlling landlords” with her $16.5 billion housing plan and wants to greatly expand tax relief for middle-class home loan borrowers at the expense of tax deductions for the wealthy. Additionally, the sweeping Green New Deal bill, which she and Sen. Ed Markey of Massachusetts co-sponsored this year, could force landlords to make big energy-efficiency upgrades to their buildings. And with a projected cost of between $50 and $90 trillion, the federal plan would be mostly covered by tax revenue.

The millennial congresswoman, widely known as AOC, has quickly become a national force with close to 5.5 million Twitter followers. In her rapid rise, she’s also earned the wrath of Republican critics, while other political upstarts have followed in her footsteps.

Here’s a breakdown of some of the hotly contested real estate agendas coming out of Washington in 2019.

$1T

Florida

An estimate of the total damage to coastal properties and public infrastructure if global temperatures rise 2°C above pre-industrial levels, according to the Green New Deal. The bill calls for no more fossil fuels and the switch to 100 percent clean energy by 2029, while new and existing buildings would need to adopt “maximal energy efficiency.” A similar proposal in New York City became law in May.

7.4M

The amount of affordable housing units that would be built or fixed up under Sanders’ proposal, at an estimated cost of $1.48 trillion. The Vermont senator has also vowed to create 2 million new mixed-income apartments and make Section 8 vouchers an entitlement for all Americans, while national public housing would get $70 billion in improvements, including high-speed internet access.

$4B

“Emergency funds” to be set aside for middle-class rental housing, outlined in Warren’s American Housing and Economic Mobility Act. For borrowers who owe more on their mortgages than their homes are worth — a casualty of the last recession — the Massachusetts senator wants to allocate $2 billion. She is also promoting a $500 million investment in rural housing and $2.5 billion in grants for apartments for Native Americans and Native Hawaiians.

14,000

The number of families expected to pay higher inheritance taxes under Warren’s proposed housing plan. Lowering the trigger for inheritance taxes to $7 million — where it stood during George W. Bush’s presidency — from $22 million could generate as much as $500 billion over a decade, Warren says. The new revenue would lead to “millions” of new homes and reduce housing costs by 10 percent, she argues.

1968

Republican Sen. Mike Lee

The year Congress passed the Fair Housing Act — which bans discrimination in home sales and rentals. But Republican Sen. Mike Lee of Utah wants to cut off the funding to enforce the law. His Local Zoning Decisions Protection Act of 2017, co-sponsored by Sen. Marco Rubio of Florida, would prohibit the use of federal money to investigate compliance, which Lee and Rubio call ineffective and wasteful.

100%

Presidential candidate and former HUD secretary Julián Castro has vowed to award generous tax credits to renters who earn up to 100 percent of their area median income. The promise is part of his sweeping housing plan, which could cost close to a trillion dollars over a decade. Like several of his peers, Castro wants to cap the max amount renters spend each month on housing costs at 30 percent of their income.

8M sq. ft.

The size of Amazon’s proposed Long Island City campus — before the e-commerce giant killed its offer in the face of local opposition. AOC and State Sen. Michael Gianaris came out against the plan to award Amazon $3 billion in subsidies for the creation of up to 25,000 new jobs. But Gov. Andrew Cuomo and other proponents of the deal argued that those incentives were necessary since Amazon was considering other locations. The company now plans to anchor its “HQ2” in Arlington, Virginia.