White House Pushes Rent Cap, Reigniting Debate on Housing Policy

When the Biden administration laid out a suite of plans this week to address housing affordability, it added a bold update to previous proposals — and sent the housing industry and the economics world buzzing.

The White House called on Congress to pass legislation giving “corporate landlords” — defined by the White House as those with over 50 rental units — a choice to cap annual rent increases on existing units at 5 percent annually or lose federal tax breaks based on property depreciation.

The proposal is expected to go largely unaddressed this year, with Congress in campaign mode. But public reaction has been lively.

Tenant organizations and progressive leaders generally allied with the administration’s economic team cheered the news. Yet a range of economists, Wall Street analysts, real estate groups and landlord associations responded with forceful critiques, assailing the limits as counterproductive.

“Increasing the supply of affordable rental housing nationwide — not politically motivated and self-defeating rent control proposals floated during election campaigns — is the best way to alleviate affordability constraints for renters,” Robert D. Broeksmit, the president of Mortgage Bankers Association, said in a statement.

The policy would affect about 20 million units in the country, roughly half of all rental properties.