3 MIN READ
Published July 17, 2024
President Joe Biden has proposed a new plan to control rent increases across the country, aiming to help renters facing steep rent hikes. The proposal would limit rent increases to 5% per year for the next two years for landlords with 50 or more rental units. This would cover around 20 million rental units in the U.S.
Landlords who exceed this limit would lose certain federal tax benefits, such as faster depreciation write-offs. However, many in the real estate industry and some economists believe that rent control could lead to higher rents in the long run.
David Dworkin, President and CEO of the National Housing Conference (NHC), criticized the proposal, saying, "Rent caps will hurt the housing supply." He stressed that the real problem is the lack of enough housing to meet the growing population’s needs.
Bob Broeksmit, President and CEO of the Mortgage Bankers Association (MBA), also opposed the proposal. He argued, "Rent control distorts market prices and discourages new construction," and called the proposal politically motivated. He added that the chances of it passing Congress are slim but warned that if it did, it would negatively impact renters and the rental housing market.
On the other hand, Diane Yentel, President and CEO of the National Low Income Housing Coalition (NLIHC), supported the proposal. She called it "historic" and said it could have prevented many families from becoming homeless after the pandemic.
Tony Carrk, Executive Director of Accountable.US, urged Congress to act quickly. He questioned, "Why should landlords who refuse to limit rent increases receive tax breaks at the expense of renters?"
Biden’s plan also includes measures that could be implemented without Congress. The Federal Housing Finance Agency (FHFA) would provide protections for renters of multifamily units, including a 30-day notice for rent increases and expiring leases, and a five-day grace period for late fees.
The Bureau of Land Management (BLM) announced it would open a public comment period on selling 38 acres of public land in Nevada for affordable housing. They are also considering buying more land in Southern Nevada and the Las Vegas Valley. Biden made this announcement during a campaign stop in Las Vegas.
Additionally, the U.S. Department of Housing and Urban Development (HUD) announced $325 million in grants for affordable housing and community development under the Choice Neighborhoods program.
Biden’s proposal is part of a broader effort to tackle rising housing costs, a key factor in the current inflation issue. Zillow reports that nationwide rents have risen by 32.1% since the pandemic began. A Redfin report also found that homeowner mortgage payments have nearly doubled in swing states since the last presidential election.
For homeowners, Biden’s plan includes tax credits for first-time homebuyers and those moving to their second home, as well as monthly tax credits for mortgage payments.
This proposal reflects Biden’s commitment to making housing more affordable during challenging economic times.