President Joe Biden recently introduced a comprehensive plan aimed at addressing the escalating housing costs that have become a pressing concern for many Americans. The proposal, which is contingent on congressional approval, comprises two key components.
The first part of the plan involves revoking tax credits from landlords who increase rent by more than 5% annually over the next three years. This measure specifically targets larger landlords with portfolios exceeding 50 units, encompassing over 20 million rental units nationwide. However, exceptions will be made for new construction and extensively renovated properties to encourage the expansion of rental housing options.
In a statement, President Biden emphasized his commitment to reducing housing expenses for families, contrasting his approach with the previous administration's policies favoring corporate landlords. He urged bipartisan support in Congress to pass the plan swiftly to alleviate the financial burden on American households.
Despite a general slowdown in inflation, housing costs remain a significant obstacle for many individuals. A record 22.4 million renter households spent more than 30% of their income on rent and utilities in 2022, reflecting a notable increase over the past few years. Recent data indicates that while overall inflation rates have moderated, housing prices have surged by 5.2% annually, outpacing the broader inflation trend.
Public sentiment underscores the urgency of addressing economic challenges, with 36% of Americans identifying economic issues as the foremost concern in the country. Notably, 14% of respondents highlighted the high cost of living as a primary issue affecting the US.
President Biden also announced additional initiatives to tackle housing affordability, including leveraging surplus federally owned land for constructing affordable homes. Federal agencies are exploring options to repurpose underutilized properties, with the aim of expanding housing availability.
Furthermore, the administration allocated $325 million in grant funding to seven cities for housing development and neighborhood revitalization projects. These efforts align with previous proposals, such as the mortgage relief credit aimed at supporting middle-class, first-time homebuyers.
While the plan to cap rents has sparked debate, a senior administration official clarified that it serves as a temporary measure to bridge the gap until more rental units enter the market. With 1.6 million units currently under construction in the US, the administration remains focused on addressing housing affordability challenges.
