Across the country, a number of ballot initiatives addressing the various and complex aspects of the housing market were voted upon in the recent midterm elections. With rising interest rates, renters in many California cities including Santa Monica, Richmond and Pasadena will see some reprieve with the passing of new legislation that caps rent increases to below the rate of inflation. In Northern California, voters supported measures that would further enhance protections for tenants against evictions.
In NY, all eyes were on the Governor’s race, where incumbent Kathy Hochul managed to secure her seat (albeit by the narrowest margin in nearly 20 years). A Hochul administration likely carries with it support for, among other things, the continuation (or evolution) of the 421a tax abatement for rental development in New York City.
At a National level, the impact is less clear, though many suspect that a Republican-controlled House means the end of tax incentives that helped first-time homebuyers with up to $15,000 of refundable federal credits. Despite the change of control in the House, President Biden and the Democrat-controlled Senate will likely sustain the measures for lower premiums for FHA loans (25 basis point cuts to both the upfront and annual fees). At a time when the cost of borrowing is rising at the fastest clip in recent history, lower premiums are only a good thing for those looking to access homeownership in markets where FHA loans apply.