Biden proposes rent cap for apartments with 50 or more units as housing crisis mounts

WASHINGTON — In a bid to make housing across the United States more affordable, President Joe Biden unveiled a new plan Tuesday that would keep rent from rising by more than 5% per year for about half of the landlords in the United States.

Channel 2 Washington Correspondent Nicole D’Antonio spoke to housing experts about how the proposal could impact both housing supply and landlords if the proposal is enacted.

According to the White House, the president’s proposal would keep landlords from pushing rent prices up by more than 5% or risk losing a major tax break, but it would only impact landlords with more than 50 units.

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That’s about half of all rental properties in the U.S.

The policy also would not apply to units that have yet to be built.

While the plan was proposed by the president, it would still need approval from Congress.

Critics of rent caps argue they don’t work. Instead, they say any attempts to control rent could actually discourage developers from building new homes at all.

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“This is a supply-driven crisis,” David Dworkin, from the National Housing Conference, told Channel 2 Action News. “The only way we are going to deal with the increase in rents that I know people are suffering with is going to be to build more supply. The law of supply and demand is never repealed. And the answer is build more affordable housing.”

According to Harvard University’s Joint Center for Housing Studies, nearly half of renters in the U.S. spend more than 30% of their income on housing and utilities, and the shortage of homes doesn’t help.

Households paying more than 30% of their income on housing are considered “cost-burdened,” according to the U.S. Department of Housing and Urban Development.

U.S. Treasury Secretary Janet Yellen warned about that over the summer, but said she’s seen some progress.

“Total units under construction remain at a 50-year high. But we face a very significant housing supply shortfall that has been building for a long time,” Yellen said.

Biden spoke about the plan for introducing a rent cap on Tuesday while in Nevada, a s state that’s seen one of the biggest housing cost increases across the country.

Atlanta rent prices average about $2,400, according to data from Zillow. Zooming in on the Atlanta metro area, prices range between $2,095 per month in McDonough to as high as $2,600 in Cumming, though prices do fluctuate based on the type of unit being rented, such as number of rooms, area and amenities.

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