Biden calls for capping annual rent increases at 5% as he tries to show plans to tame inflation

Josh Boak, Associated Press

1 hour ago

President Joe Biden speaks from the Roosevelt Room of the White House in Washington, Sunday, July 14, 2024, about the apparent assassination attempt on former President Donald Trump during a campaign rally in Pennsylvania. (AP Photo/Susan Walsh)

WASHINGTON (AP) — President Joe Biden is poised to propose a 5% cap on annual rent increases for tenants of major landlords as he tries to show he is doing something about the high cost of housing, according to a person familiar with the plan.

The proposal, which will be announced during the president’s visit to Nevada on Tuesday, is being championed by Biden amid a tense presidential campaign and at a time when housing costs have been a major driver of overall inflation.

But for the bill to become law, Democrats would have to have complete control of Congress. Moreover, most policymakers have said the best way to curb housing costs would be to build more and change land-use regulations.

The person familiar with the project spoke on condition of anonymity because the proposal has not yet been officially announced.

Biden himself introduced the announcement at his NATO press conference on Thursday, embedding it in comments blaming inflation on companies trying to maximize profits in the wake of the pandemic.

“It’s time for things to get back to normal,” Biden said. “If I’m re-elected, we’ll make sure rents stay at 5 percent.”

The Washington Post first reported details of the plan on Monday, which would apply only to homeowners with 50 or more homes. The price cap would not apply to homes that have not yet been built.

White House officials declined to comment.

The national median rent was $1,411 per month in June, up from about $1,150 in early 2021, when Biden became president, according to Apartment List.

Rental asking prices rose after the pandemic and have since fallen, but Harvard University’s Joint Center for Housing Studies found in its most recent report that half of renters were “cost-burdened” because they were spending more than 30% of their income on housing and utilities.

In recent months, the housing sector has been a major contributor to keeping the consumer price index at a high 3% per year. Inflation has been a key political obstacle for Biden, who faces Donald Trump, the former president and Republican nominee.

The president has proposed policies to increase housing construction, but industry representatives have been quick to criticize rent caps as ineffective in addressing the overall shortage and potentially leading to fewer housing units than the country would otherwise have.

“This is not going to create a single housing unit, which is what is needed to create more housing for Americans,” said Sharon Wilson Geno, CEO of the National Multifamily Housing Council. “This is really just campaign rhetoric.”

Geno stressed that landlords must be able to meet costs such as maintenance, insurance and local and state taxes. If these costs exceed what they can charge for rent, the risk is that landlords will make less effort to maintain their properties and tenants will find themselves in a more precarious situation.

“This means that the quality of housing suffers,” she said.

But affordable housing advocates said that if Biden’s proposal had already been in effect, it likely would have reduced evictions and homelessness.

“The unprecedented increase in homelessness in communities across the country is the result of the equally unprecedented and unjustified rent increases that occurred just a few years ago,” said Diane Yentel, president and CEO of the National Low Income Housing Coalition. “Had these kinds of rent protections been in place at the time, many families could have avoided homelessness and remained stably housed.”