President Joe Biden's Proposal to Cap Housing Rental Increases at 5%
What this means for landlords and renters
On Tuesday, July 16th President Biden proposed a cap on rent hikes to bring stability to the rental market and prevent sharp annual price increases.
In March 2024, the national median rent for an apartment was nearly $2,000, up more than 20% from five years earlier, according to Rent.com’s April Rent Report. Rising rents are affecting many Americans, with the number of cost-burdened renters at an all-time high.
Biden's plan would eliminate a key tax write-off for landlords who raise rents by more than 5% annually, discouraging steep rent increases. This would apply only to existing rental units and landlords with more than 50 units, to avoid impacting new developments. If passed, the proposal would take effect this year and last until 2026, stabilizing rents for 20 million rental units.
The White House is also working to eliminate rental junk fees and tackle rental price collusion among landlords. However, critics argue that rent caps don't address the root problem of housing unaffordability – low inventory in the for-sale housing market. The National Housing Conference warns that the cap could further reduce the housing supply by discouraging landlords from investing and prompting tenants to stay put in their current units.