Several housing groups recently slammed President Joe Biden's proposal to cap rent hikes at 5% for landlords with larger portfolios.
In a statement, the Housing Solutions Coalition, an alliance of major housing organizations, slammed Biden's plan, noting that it would hurt renters rather than help them.
"Decades of academic research from across the United States and around the world clearly show that rent caps - more commonly known as rent control - 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. Despite President Biden's mention of rent caps during the debate, he and his policy experts know that the real reason so many Americans struggle with housing costs is because we need to build more housing," the statement read.
"There is no debate. Rent caps hurt renters and communities."
Kevin Sears, president of the National Association of Realtors, said Biden's proposed measure doesn't work, adding that it would likely fail at improving the financial situation of renters.
"NAR opposes misguided attempts to cap or control rental rates. Price controls may seem appealing, but they have backfired on local governments and harmed the people we need to help the most," Sears said in a statement.
"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."
The National Multifamily Housing Council also slammed the proposal, saying it is unlikely to create any new units and would only raise housing costs, as quoted by The Real Deal.
Biden's Rent Hike Cap Proposal
On Tuesday, Biden announced a proposal aiming to cap rent increases by penalizing landlords who raise rental prices by more than 5% each year. The proposal is aimed at landlords owning more than 50 apartments across their portfolio. Landlords who fail to meet the cap will lose out on a lucrative tax benefit that permits owners to reduce the taxable income of an asset at a faster pace than usual.
The cap would exclude new construction or substantial rehabilitation and renovation properties. The proposal would last two years but is still subject to congressional approval.