Biden Admin Wants to Cap Rent Increases at 5% Nationwide
The Washington Post reports that President Joe Biden will announce a plan to cap rent increases at 5% nationwide in Nevada on Tuesday.
Congress would need to approve the plan, so it’s unlikely it will get past the House.
Here are some points:
- Landlords lose tax benefits if they raise rent higher than 5%.
- It only applies to those who have over 50 units.
- Won’t cover under-construction units to not discourage people from building new housing.
Biden hinted at the plan at the debate. He expanded on it slightly during a NATO news conference.
“It’s time to get things back in order a little bit,” Biden said at the time. “For example, if I’m reelected, we’re going to make sure that rents are capped at 5 percent increase — corporate rents, for apartments and the like, and homes, are limited to 5 percent.”
You cannot treat every area the same. States don’t even have static cost of living stats.
The rent in Chicago is nothing like the rent in the smaller suburbs.
So why does rent go up?
Supply and demand. Market conditions. Property improvements. Rising property taxes.
New York City tried rent control. It fell on its face because in June 2023, the city told those rent-stabilized apartment landlords that they could raise rent:
On Wednesday, the city’s Rent Guidelines Board (RGB) ordered that annual adjustments for one-year leases starting in October 2023 on New York City’s roughly 1 million rent-stabilized apartments could rise by 3 percent and 5 percent for two-year leases.The board cited rising inflation, which was 6.1 percent in New York City, as a reason for keeping rent increases low for tenants. That level of inflation nevertheless means that real rents are falling for building owners who are also seeing their own costs rise faster than inflation.An RGB report from earlier this year found that owners’ operating costs rose by 8.1 percent.The board’s effort to split the baby on rent increases doesn’t seem to have appeased anyone.Tenant advocates were furious that the board didn’t accede to their demand for a zero percent rent increase.
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