Biden proposes 5% cap on rent hikes for corporate-owned apartments
Michael Lyle
(States Newsroom) President Joe Biden wants to cap yearly rent increases on corporate owned properties nationwide at 5% and free up federal land in Nevada to build more affordable housing.
The White House announced a series of proposals on Tuesday to address the growing housing crisis, which includes calling on Congress to pass legislation to stabilize rents for certain properties nationwide.
The administration said a recent analysis from Accountable.US, a center-left watchdog group, showed 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.”
Corporate ownership of apartment units has expanded dramatically over the last several years in Nevada and nationwide.
Under what the White House is proposing, landlords would have the option of not raising rents more than 5% or risk losing federal tax breaks.
“If you raise rents more than 5%, you should lose valuable tax breaks,” Biden said in a statement.
The proposal would apply to landlords that have more than 50 units. New construction would be exempt along with development that has gone through substantial renovation or rehabilitation.
The rent cap would require approval from Congress, which won’t happen while Republicans control the House. Democrats hope to regain control of the House, and retain control of the Senate, in this year’s elections, but many Democrats are increasingly worried that Republicans will control one if not both houses when the next Congress convenes next year.
Leo Murrieta, the executive director of Make the Road Action Nevada, called the proposal “a significant victory for tenants and communities struggling with unaffordable housing.”
“It reflects the power of collective advocacy and the relentless efforts of housing justice organizations,” he said. “By limiting rent increases, this policy provides much-needed relief for working families, seniors, and individuals on fixed incomes facing displacement and financial instability due to unchecked rent hikes.”
The administration also announced it is repurposing federal land, which is said will lead to building “tens of thousands of affordable homes” across the country.
“My administration is also taking action to cut red tape and repurpose public land to build more affordable homes—including thousands of new homes in Nevada—and announcing new grants to build thousands of homes from Las Vegas to Syracuse,” Biden said.
The Bureau of Land Management is expected to open a public comment period for the sale of 20 acres of public land in Clark County.
The BLM is considering an additional 560 acres of public land in Southern Nevada that could support affordable housing development.
Gov. Joe Lombardo, who has endorsed former President Donald Trump, criticized Biden in March for not doing more to make more federal land available for housing development. He sent letters to the White House calling for them to act.
“While the release of federal land for subsidized housing in Las Vegas is one arrow in our quiver, significant work remains in alleviating high housing costs for the middle class and eliminating federal barriers to housing development across the state,” Lombarod said Tuesday in a statement issued by his office.
“I’m also concerned about President Biden’s rent control proposal, which studies have repeatedly shown to inadvertently raise rental costs and lead to lower-quality housing options.”
Though Nevada, like most of the country, is experiencing a housing crisis, some federal and local experts worry that urban sprawl could create other problems, such as the lack of transportation infrastructure needed to connect people to jobs, food and other resources.
They have pointed out infill development, which utilizes existing urban spaces, might be a better solution.
The administration on Tuesday also announced the Federal Housing Finance Agency is rolling out protections for renters in properties that received financing by Fannie Mae and Freddie Mac.
Landlords of those properties would have to give a 30-day notice before increasing rent or before a lease expires. It would also provide a five-day grace period before late fees are added on unpaid rent.
The administration also announced the Southern Nevada Regional Housing Authority was awarded a $50 million grant that is expected to build 400 new units of housing and restore 235 existing affordable housing units for extremely low-income renters.
The grant was part of a larger initiative Biden announced Tuesday to award $325 million to cities across the nation as part of the Choice Neighborhood Implementation Grant, which helps neighborhoods redevelop “distressed housing with high-quality mixed income options.”
Biden touched on his recent housing proposals briefly while speaking at the NAACP conference in Las Vegas. “We’re going to build 2 million affordable homes,” Biden said, and “cap rent increases at 5% so corporate landlords can’t… anyway I don’t want to get going, I’m going to get very upset.”
It wasn’t the first time he used Las Vegas as a backdrop to focus on housing policies.
While visiting Southern Nevada in March, Biden announced a series of efforts to address the crisis and called for $258 billion in housing investments in his Fiscal Year 2025 budget and expanding the Housing Choice Vouchers, commonly referred to as Section 8 assistance.
The National Apartment Association and other housing industry groups content the rent cap would not make rental housing more affordable.
“Decades of academic research from across the United States and around the world clearly show that rent caps…reduce the supply of available housing and fail to target those renters who need help the most while simultaneously harming other residents and the communities they reside in,” the organizations said in a joint statement after Biden had raised the prospect of rent caps last month.