Biden proposes nationwide rent cap
Photo by Julie Ricard on Unsplash
President Joe Biden this week unveiled a proposal to cap rent at 5 percent annually for apartments owned by corporate landlords. The plan would apply to landlords who own more than 50 units in their portfolio, covering about 20 million units nationwide, roughly half of all rentals. The legislation requires congressional approval, including from the Republican-controlled House, to move forward.
Under Biden’s policy proposal, large landlords would be given a choice to either cap rent increases on existing units at 5 percent or lose out on valuable federal tax breaks for the next two years. There’s an exception for new construction and units that undergo substantial renovation.
The announcement comes after Biden detailed a plan in March to lower housing costs and increase supply by building and preserving two million homes and making it easier to own a home through a mortgage relief credit, down payment assistance for first-time home buyers, and lowering closing costs.
In a fact sheet released on Tuesday, the White House described the policy as a “bridge to rents stabilizing as President Biden’s plan to build more takes hold,” adding that the “combination of anti-gouging policies and historic levels of support to build more affordable housing effectively balances the needs of tenants without limiting incentives for more supply.”
“Families deserve housing that’s affordable—it’s part of the American Dream,” Biden said in a statement. “Rent is too high and buying a home is out of reach for too many working families and young Americans, after decades of failure to build enough homes. I’m determined to turn that around.”
“Today, I’m sending a clear message to corporate landlords: If you raise rents more than 5% on existing units, you should lose valuable tax breaks.”
Biden’s proposal marks the first time a sitting president has supported rent control since the 1970s and comes as the country faces a housing crisis. Local groups and national organizations have long pushed for federal action to regulate rent and protect tenants.
Cea Weaver, director of the New York-based Housing Justice for All Coalition, applauded the president’s proposal.
“Families across New York state are struggling to stay in their homes because landlords keep jacking up our rents for no reason but greed,” Weaver said in a statement. “President Biden is right: rent caps ensure families can set roots in their communities and stay for the long term. Biden should act now and not wait for Congress to keep rents affordable.”
She added: “The research is clear: embracing rent stabilization keeps rents affordable, holds communities together, and boosts voter turnout. In an election year, voters will be looking for leaders who are willing to deliver for them on bread and butter issues. It’s time for elected officials at all level of office to commit to keeping renters in their homes.”
The National Housing Conference (NHC), a coalition of affordable housing stakeholders, opposed the proposal and said rent caps would ultimately increase rents and reduce the capital needed to create more housing supply.
“While we appreciate the Administration’s intent to address the shortage of affordable rental housing, research has consistently shown that mandatory rent control is an ineffective policy that fails to address the underlying issues of housing affordability – the fact that our nation’s housing supply has not kept pace with the needs of our growing population,” NHC President David M. Dworkin, said in a statement.
“Rent Caps don’t work and will have a chilling effect on housing supply. Exempting new construction will do nothing to change this, making clear that long term investments in housing can be made uneconomic retroactively. It’s time to stop making policy by bumper sticker and get serious about housing production. Unfortunately, the Administration’s plan will not help a single person over the long term or build any desperately needed affordable housing.”
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