President Joe Biden is set to unveil a proposal to cap annual rent increases at 5 percent for major landlords, aiming to address the housing crisis and rising rent costs. The announcement, scheduled for Tuesday in Nevada, comes as Biden seeks re-election and tries to tackle one of the most pressing issues facing American renters.
Biden’s proposal specifically targets landlords with more than 50 units, introducing a cap on rent hikes that would prevent increases beyond 5 percent annually. The plan also includes a provision to strip tax benefits from landlords who exceed this cap. However, this ambitious proposal would require congressional approval, making its future uncertain unless Democrats secure majorities in both chambers.
Nevada, the state where Biden will formally introduce the plan, has experienced one of the largest surges in housing costs in the country. The president previewed the proposal during a NATO news conference last week, where he emphasized the need to control rent increases as part of broader efforts to curb inflation.
“It’s time things get back in order a little bit,” Biden said. “If I’m reelected, we’re going to make sure that rents are kept at 5% increase.”
The median national rent was $1,411 a month in June 2023, up from approximately $1,150 in early 2021 when Biden took office, according to Apartment List. This significant rise in rent prices has made housing costs a primary contributor to the consumer price index, which remains elevated at 3 percent annually. Inflation, driven largely by these housing costs, has been a critical issue for Biden as he campaigns for re-election.
Housing advocates have welcomed the proposal, arguing that it would provide much-needed relief to renters facing exorbitant rent hikes. Diane Yentel, president and CEO of the National Low Income Housing Coalition, emphasized the potential benefits of the plan.
“The recent unprecedented increases in homelessness in communities across the country are the result of those equally unprecedented—and unjustified—rent hikes of a couple years ago,” Yentel said. “Had such protections against rent gouging been in place then, many families could have avoided homelessness and stayed stably housed.”
Kendra Brooks, the first Working Families Party member elected to the Philadelphia City Council, also expressed support for Biden’s proposal, calling it “exactly the kind of leadership that working families need.” Housing has rapidly climbed as a cost-of-living concern, particularly among younger demographics, making this proposal a significant move in the eyes of progressive officials and activists.
Shamus Roller, executive director of the National Housing Law Project, highlighted the impact of tenant organizing in pushing rent control to the national stage. “Tenant organizing has created this change. It’s a proposal for Congress which will face serious headwinds but the president just called for rent caps (even if only temporarily),” Roller noted.
However, the proposal has faced criticism from housing industry representatives. Sharon Wilson Géno, CEO of the National Multifamily Housing Council, argued that the plan does not address the underlying issue of housing supply.
“This is not going to create a single unit of housing—which is what is needed to create more housing opportunities for Americans,” Géno said. “Landlords need to be able to keep up with costs such as maintenance, insurance, and state and local taxes. If those costs exceed what they can charge for rent, the risk is that landlords will do less to maintain their properties and tenants could be worse off.”
Despite these criticisms, the Biden administration is also pushing for policies to increase housing construction. The proposal includes incentives for local governments to change zoning codes and new federal financial incentives for builders. If implemented, these measures could bring 2 million new units to the market, in addition to the 1.6 million already in the pipeline.
Jim Parrott, nonresident fellow at the Urban Institute and co-owner of Parrott Ryan Advisors, emphasized the importance of combining rent control with efforts to expand housing supply. “It would make little sense to make this move by itself. But you have to look at it in the context of the moves they propose to make to expand supply,” Parrott said. “The question is: Even if we get all these new units built, what do we do about rising rents in the meantime? Coming up with a relatively targeted bridge to help renters while new supply is coming online makes a fair amount of sense.”
The proposal’s success hinges on the political landscape post-November elections. It requires solid Democratic control of Congress to become law, a challenging feat in the current political climate. Biden’s emphasis on rent control also reflects Democrats’ growing concern that Trump could win key states like Nevada.
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