Biden Plan to Cap Rents at 5% Would Deter Production, Harm Affordability

Carl Harris, chairman of the National Association of Home Builders (NAHB) and a custom home builder from Wichita, Kan., today issued the following statement after President Biden announced he is proposing to cap rents at 5% per year for landlords who own more than 50 units:

“Rent control in any form is bad for housing and President Biden’s tax plan to cap rents at 5% on existing multifamily structures will worsen the housing affordability crisis by discouraging developers from building new rental housing units at a time when the nation is experiencing a shortfall of 1.5 million housing units. These rent caps would also hurt existing tenants – those that the president is trying to help – because owners and developers would be unable to cover rising costs if rents are fixed. Leading economists and numerous studies over the years agree that rent control would aggravate affordability problems by exacerbating the housing shortage in America.

“If the Biden administration is serious about wanting to lower costs for renters, its policies should focus on increasing the rental housing supply. The best strategy to achieve this goal on the tax front is to strengthen the Low-Income Housing Tax Credit (LIHTC), which is the best tool to finance the production of affordable rental housing. NAHB has developed a 10-point plan to tackle the affordability crisis that calls for expanding the LIHTC, reducing regulations that stall multifamily development projects and adopting reasonable and cost-effective building codes. These common-sense solutions will boost multifamily housing production and make renting more affordable.”