Special to the Vanguard
The Housing Solutions Coalition (HSC), a broad coalition of housing groups, issued a statement on Tuesday cautioning against President Biden’s proposed rent cap.
“This proposal amounts to typical election year rhetoric,” the group said in a statement. “Rent caps, also known as rent control, have never been viable solutions to the ongoing affordability challenges facing our nation’s rental housing market.”
The group argued that rent control and other such policies “often exacerbate housing shortages, leading to higher rents and lower quality housing.”
They added, “As the country faces a massive housing deficit, common sense solutions are desperately needed that prioritize building more housing, not erecting additional barriers to housing development. “
The statement is in contrast to that of the National Housing Law Project on Monday.
“Tenants across the country fought for years to get the federal government to care about the rent. We applaud the organizing that led President Biden to get real about what the federal government can do to increase housing stability for tenants,” said director Shamus Roller who called the move “historic.”
“The President knows that fixing the housing crisis will require a whole-of-government approach. That includes directing Congress to pass major policies that put people over profit. While this is a short-term fix, we commend this proposal and the President’s focus on getting us to a long term solution for the 114 million people who rent,” Roller continued. “Biden’s proposal exemplifies how the federal government can shape housing policy that protects and empowers tenants. NHLP is committed to additional federal action that protects tenants from corporate landlord exploitation.”
But, as indicated, not everyone agrees with this approach.
On Tuesday, the coalition of Housing Groups argued for regulatory and financial incentives for home builders and multifamily owners/operators, a solution that would bolster new housing development now and in the future.
They added that “increasing subsidies for those in need helps reduce the financial burden on low-income families, ensuring they have access to safe, stable and affordable housing.”
By contrast, rent caps, they argued, “do the opposite” and often hinder “new development while keeping existing units out of the rental market.”
Former President Obama’s chair of the Council of Economic Advisers, Jason Furman, said to the Washington Post, “Rent control has been about as disgraced as any economic policy in the tool kit. The idea we’d be reviving and expanding it will ultimately make our housing supply problems worse, not better.”
President Biden on Monday called on Congress to pass legislation giving corporate landlords a choice to either cap rent increases on existing units at 5% or risk losing current valuable federal tax breaks.
He also called for the repurposing of public land sustainability to enable as many as 15,000 additional affordable housing units to be built in Nevada; and rehabilitating distressed housing, building more affordable housing, and revitalizing neighborhoods, including in Las Vegas, Nevada.
“Families deserve housing that’s affordable—it’s part of the American Dream. 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,” the President said in a statement on Monday.
He added, “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.”
The plan calls for Congress to pass legislation presenting corporate landlords with a basic choice: either cap rent increases on existing units to no more than 5% or lose valuable federal tax breaks.
Corporate landlords, under this plan, beginning this year and for the next two years, would only be able to take advantage of faster depreciation write-offs available to owners of rental housing if they keep annual rent increases to no more than 5% each year.
This would reportedly apply to landlords with over 50 units in their portfolio, covering more than 20 million units across the country. It would include an exception for new construction and substantial renovation or rehabilitation. The policy is a bridge to rents stabilizing as President Biden’s plan to build more takes hold.
