WASHINGTON, D.C. – July 1, 2013 – (RealEstateRama) — Rep. Raúl M. Grijalva today introduced the Right to Rent Act of 2013 (H.R. 2580), an updated version of a bill he originally introduced in 2009 to allow families facing foreclosure to remain in their homes as renters by paying fair market value each month.
The Right to Rent Act provides a strong incentive for banks or other lenders to modify mortgages to avoid becoming landlords. The bill allows a single-family homeowner who has resided in the home for at least 2 years – and purchased before 2007 at or below the median home price for that metropolitan area – to rent the home for up to five years. The provision is meant to help homeowners hit by the housing bubble of the last decade, rather than to bail out speculators.
If a lender chooses to pursue foreclosure, the family has 25 business days to choose to rent and stay in the home as tenants, preventing the social problems, crime and lowered property values that often follow vacancies. This allows children to continue attending school and provides families adequate time to prepare a transition to a more permanent situation.
The proposal requires no additional tax dollars or federal agencies and provides immediate relief for millions of homeowners in foreclosure. The bill, designed to prevent empty neighborhoods and homelessness, has historically been referred to the House Committee on Financial Services.
Original cosponsors of the bill include Reps. Yvette Clarke, Lacy Clay, John Conyers, Keith Ellison, Rubén Hinojosa, Rush Holt, Marcy Kaptur, Barbara Lee, Eleanor Holmes Norton and Frederica Wilson.
“Housing shouldn’t be a politically charged issue – this is a basic question of fixing a problem we can’t ignore,” Grijalva said. “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.”
The foreclosure crisis is especially acute in communities of color, and has shown few signs of improving. According to Wasted Wealth, a report released in May by The Alliance for a Just Society based on an analysis of nationwide 2012 data:
The most devastating impacts of the ongoing foreclosure crisis were in majority communities of color and racially diverse communities: ZIP codes with majority people of color populations saw 17 foreclosures per thousand households with an average of $2,200 in lost wealth per household. These outcomes persisted in racially diverse communities (populations over 16% people of color) where the foreclosure rate was 15 per thousand households and average wealth loss per household was $2,000. In sharp contrast, segregated white communities experienced only 10 foreclosures per thousand households and a wealth loss of $1,300 per household.