President Biden has announced a plan to cap rent increases at 5% per year for corporate landlords with more than 50 units. This initiative is part of a broader strategy to lower housing costs and address the housing shortage. The plan also includes repurposing public land for affordable housing and rehabilitating distressed properties. The Biden administration emphasizes that these actions will help protect tenants from excessive rent hikes and promote the development of new affordable housing units.
However, the National Association of Home Builders (NAHB) has expressed significant concerns about this proposal. Carl Harris, chairman of the NAHB, argues that rent control in any form is detrimental to the housing market. According to Harris, “These rent caps would also hurt existing tenants – those that the president is trying to help — because owners and developers would be unable to cover rising costs if rents are fixed.” The NAHB believes that such measures will discourage developers from building new rental units, exacerbating the housing shortage and worsening the affordability crisis.
The NAHB suggests alternative solutions to address housing affordability. They advocate for strengthening the Low-Income Housing Tax Credit (LIHTC), reducing regulatory barriers that delay multifamily development, and adopting cost-effective building codes. Harris states, “If the Biden administration is serious about wanting to lower costs for renters, its policies should focus on increasing the rental housing supply.” By focusing on these strategies, the NAHB believes the government can more effectively boost multifamily housing production and make renting more affordable for Americans.