President Joe Biden on Tuesday released a legislative proposal — nationwide rent control — that has angered the real estate industry.
Biden’s new plan would limit annual rent increases to 5% for two years for landlords who manage 50 or more rental units, which the administration says would cover 20 million units, about half of all rental units nationwide. New construction and units that have been “substantially” renovated and restored will be exempt.
Landlords who violate the cap will be stripped of federal tax benefits. The only thing mentioned in the White House fact sheet is “faster depreciation write-offs.”
While it’s unclear what impact this proverbial legislative “stick” will have on the currency, the real estate industry and some economists have long argued that rent control policies can actually cause rents to rise.
Housing industry groups were quick to condemn Biden’s proposal. national housing conference (NHC) President and CEO David Dworkin issued a statement claiming that rent caps will have a “chilling effect on housing supply.”
“While we applaud the administration’s intent to address the affordable housing shortage, research consistently shows that mandatory rent control is an ineffective policy that fails to address the fundamental problem of housing affordability—in fact, our nation’s housing supply is not keeping pace. meeting the needs of our growing population,” Dworkin said.
Bob Broeksmit, President and CEO Mortgage Bankers Association (MBA) issued a statement echoing the NHC’s statement.
“There are countless examples in the United States and around the world that prove rent control is a counterproductive policy concept that distorts market pricing, hinders new construction, and reduces the quality of rental housing, ultimately harming renters,” Broxmit said. Benefits. “While this proposal has a good chance of passing Congress, federal rent control laws would be disastrous for renters and our nation’s rental housing market. ”
Diane Yentel, President and CEO National Low Income Housing Coalition (NLIHC) released a statement praising the proposal as “historic” while calling for the enactment of elements of the National Tenant Bill of Rights that the group co-authored with other affordable housing advocacy groups.
“The recent unprecedented increase in homelessness in communities across the country is a direct result of the equally unprecedented and unjustified rent increases in the wake of the pandemic,” Yentel said. “Had protections against rent fraud been in place, many families would have been Homelessness can be avoided and stable housing maintained.”
government regulatory agencies Responsibility.United States Calls on Congress to take immediate action on the proposal.
“The government’s response is common sense,” said Tony Kak, the group’s executive director. “If a big, lucrative landlord refuses to limit rent increases, why should they receive tax breaks at the expense of their price-gouging tenants?”
Rent caps aren’t the only measures in Biden’s proposal, some of which could be enacted through federal agencies without requiring legislative action from Congress.
presidential appeal Federal Housing Finance Agency (FHFA) Provides protections for tenants in multifamily apartments financed by loans obtained from this agency. These protections include 30 days’ notice of rent increases, 30 days’ notice of lease expiration, and a five-day grace period for rent arrears.
Combined with Biden’s proposal, Bureau of Land Management (BLM) announced it will open a public comment period on the sale of 38 acres of public land in Nevada for affordable housing. The BLM is also considering purchasing an additional 562 acres of public land in southern Nevada and another 26,000 acres in the Las Vegas Valley. Biden unveiled the proposal during a campaign event in Las Vegas.
Also on Tuesday, U.S. Department of Housing and Urban Development (HUD) announced $325 million in “Choice Communities” grants for affordable housing construction and community development.
The proposal is part of broader policies to address housing costs, which have been soaring since the COVID-19 pandemic began in March 2020. criticize.
according to ZilloAccording to the Observed Rent Index, rents nationwide have increased by 32.1% since the start of the pandemic. and a new report from redfin tuna found that homeowners’ mortgage payments in swing states have nearly doubled since the last presidential election.
On the home ownership front, Biden is proposing tax credits for first-time homebuyers and homeowners who upgrade to a second home, in addition to tax credits for monthly mortgage payments.
