President Joe Biden announced a comprehensive set of proposals on Tuesday aimed at reducing housing costs amid persistent inflation and soaring home prices, which are crucial concerns for voters this election year. The proposed measures, which require congressional approval, would penalize landlords who raise rents by more than 5% per year by withdrawing their tax credits. This policy targets landlords with portfolios exceeding 50 units, impacting over 20 million rental units nationwide.
An exception within the policy would encourage the construction of new rental properties and substantial renovations by excluding them from the cap. Biden emphasized that his administration aims to reverse the previous administration’s policies that favored corporate landlords, urging bipartisan support to alleviate housing costs for American families.
Despite a slowdown in overall inflation, housing costs continue to challenge many Americans, with a significant number reporting that over 30% of their income is spent on rent and utilities. Although housing price inflation has slowed, it remains above the overall inflation rate.
In addition to the rent cap proposal, Biden’s administration is exploring the use of federally owned land for affordable housing developments. Agencies like the Bureau of Land Management and the US Postal Service are considering proposals to utilize surplus land and properties for housing, aligning with broader federal efforts to increase affordable housing availability.
These initiatives coincide with grant funding announcements for several cities aimed at increasing housing stock and revitalizing neighborhoods, signaling a comprehensive approach to tackling high living costs.
However, the proposal for rent caps has met with criticism from major housing groups, who argue that such measures could decrease housing availability and fail to effectively target those in need. Critics assert that rent control policies historically tend to benefit a minority of renters while negatively affecting overall housing market dynamics and community well-being.
