In an aerial view, apartments are seen undergoing construction on February 28, 2023 in Austin, Texas. Apartment rent has fallen in major metropolitan areas around the U.S. over the past six months according to findings from The Wall Street Journal. Brandon Bell/Getty Images
President Joe Biden is set to propose a 5% cap on annual rent increases for tenants to address the high cost of housing, which is expected to be announced during his visit to Nevada on Tuesday, July 16, according to AP News.
The plan, which would apply to landlords owning 50 or more units, seeks to provide relief to renters who have faced steep increases in housing costs.
Biden hinted at this proposal during a NATO news conference, attributing inflation to companies seeking to maximize profits post-pandemic. The current US president also assures that if he's reelected, all rents will be kept at 5% increase.
Rental Real Estate reported that the average national rent in the US was $1,411 a month in June, up from roughly $1,150 in early 2021 when Biden took office.
Although rent prices have cooled since their peak, the Harvard University Joint Center for Housing Studies reported that half of renters are "cost burdened," spending more than 30% of their income on housing and utilities.
However, the implementation of the 5% increase cap would require strong Democratic control of Congress.
Most policymakers argue that the most effective way to lower housing costs would be through increased construction and changes to land use regulations. While the president has pushed for these policies before, industry representatives firmly argued that it won't solve the overall housing shortage and might lead to fewer habitable units.
For affordable housing advocates, the cap could reduce evictions and homelessness, providing much-needed stability for many families.
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