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In an attempt to reanimate a struggling re-election campaign that has been burdened by calls from within his party to step aside, President Biden is trying to shift his campaign’s focus to the challenges facing the housing market by calling for new federal rent control laws. However, his efforts have received angry pushback by organizations representing the real estate industry.

The White House published a “fact sheet” this morning highlighting the president’s proposals, which were leaked yesterday to the Washington Post. The central proposal calls for Congress to pass legislation that would give “corporate landlords a choice to either cap rent increases on existing units at 5% or risk losing current valuable federal tax breaks.” Without identifying the “corporate landlords” by name, the White House insisted they were arbitrarily raising rents.

“Some corporate landlords have taken advantage of the shortage of available units by raising rents by more than increases in their own costs—resulting in huge profits at a time when millions of Americans are struggling to cover rent each month,” said the White House statement. “And recent analysis showed that the six largest publicly-traded apartment companies reported large profits earlier this year, and many of these same landlords are named in pending litigation for their alleged use of proprietary algorithms to raise rents on tenants.”

The White House also issued a statement attributed to Biden that declared, “While the prior administration gave special tax breaks to corporate landlords, I’m working to lower housing costs for families. Republicans in Congress should join Democrats to pass my plan to lower housing costs for Americans who need relief now.”

Biden will highlight his proposals later today during a campaign stop in Las Vegas. However, several trade groups representing different stakeholders within the real estate industry have come out against the president’s plans.

“This legislative proposal will not create a single new unit while raising costs on the very residents it purports to help,” said National Multifamily Housing Council President Sharon Wilson Géno. “If the administration’s goal is to lower housing costs and support residents it would be better advised to implement policies that expand housing supply – the only real way to sustainably lower housing costs and create more housing security for renters as the Biden administration pointed out in its very own Housing Supply Action Plan. Rent control has been tried for decades and been a resounding failure. Now is the time for actual solutions, not electioneering.”

“Rent control in any form is bad for housing and President Biden’s tax plan to cap rents at 5% on existing multifamily structures will worsen the housing affordability crisis by discouraging developers from building new rental housing units at a time when the nation is experiencing a shortfall of 1.5 million housing units,” said Carl Harris, chairman of the National Association of Home Builders and a custom home builder from Wichita, Kansas. “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. Leading economists and numerous studies over the years agree that rent control would aggravate affordability problems by exacerbating the housing shortage in America.”

“Implying that rent control will solve the nation’s housing crisis is the easy way out,” said the National Apartment Association in a statement. “Rent caps, more commonly known as rent control, are failed policies that don’t work – research has shown it, the lack of affordability in rent-controlled jurisdictions reinforces it and statements from countless economists across generations and the political spectrum are crystal clear. We need leaders to stop playing politics with our housing supply. We need leaders to stop playing politics with our housing supply.”

“Increasing the supply of affordable rental housing nationwide – not politically motivated and self-defeating rent control proposals floated during election campaigns – is the best way to alleviate affordability constraints for renters,” said Mortgage Bankers Association President and CEO Bob Broeksmit. “There are endless examples in localities in America and around the world that prove that rent control is a counter-productive policy idea that ultimately harms renters by distorting market pricing, discouraging new construction, and degrading the quality of rental housing. While the odds are stacked against this proposal ever passing Congress, a federal rent control law would be catastrophic to renters and our nation’s rental housing market.”

“Rent control is a rare instance where the research is fairly conclusive: It doesn’t work,” said National Association of Realtors President Kevin Sears. “These measures fail to improve most renters’ financial situation and shift the burden of economic difficulties, inflation, and other costs onto the housing provider with no counterbalance. NAR has advocated for federal legislation and policies such as YIMBY and Neighborhood Homes Investment Act to help eliminate discriminatory land use policies and remove barriers that weaken housing production in the United States. The only way to keep cities affordable for working-class families is to ensure that the supply of housing keeps pace with the growing demand.”

Additional Proposals

Along with his push for national rent control, the Biden administration also orchestrated the Executive Branch to announce new endeavors to create affordable housing opportunities. This includes having the Bureau of Land Management create “thousands of affordable housing units” on federal land in Nevada; having the U.S. Forest Service lease its land to build workforce housing in Steamboat Springs, Colorado, and Ketchum, Idaho; and having the U.S. Postal Service repurpose certain surplus properties for housing.

The White House also said the Department of Housing and Urban Development and Health, the Department of Health and Human Services, and the General Services Administration plan to release a final rule designed to accommodate public and nonprofit developers seeking to use federal buildings and land to house the homeless.

Furthermore, the White House noted that the Department of Transportation published an interim guidance to permit transit agencies to use their property to support transit-oriented development, with the goal of making it easier to build affordable housing near transit sites.

“Families deserve housing that’s affordable – it’s part of the American Dream,” said the White House statement attributed to Biden. “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.”

Photo: Gage Skidmore / Flickr Creative Commons