Biden administration targets rent hikes with new policy proposal

In a recent government meeting, discussions centered around a new policy proposal from the Biden-Harris administration aimed at regulating rent increases for landlords with 50 or more units. The proposal seeks to prohibit these landlords from taking depreciation deductions if they raise rents by more than 5% annually.

Critics of the policy, including housing expert Mister Shlomer, voiced concerns about the potential negative impacts on housing supply. Shlomer referenced the experiences of Minneapolis and St. Paul, where St. Paul implemented rent control measures, leading to a significant slowdown in new housing construction. In contrast, Minneapolis, which did not adopt such measures, has seen continued growth in rental housing.

Shlomer highlighted that the costs of developing new apartment communities have surged by 42% from January 2022 to June 2023, while rent increases have not kept pace. He argued that imposing rent control could deter developers from investing in new housing projects, ultimately exacerbating the housing supply crisis. He emphasized the need for more housing and suggested that federal incentives could help mitigate the regulatory burdens imposed at local and state levels.

The meeting underscored the ongoing debate over rent control policies and their effectiveness in addressing housing affordability, with experts calling for a focus on increasing housing supply rather than imposing further regulations.