President Biden on Tuesday proposed eliminating tax breaks for landlords who raise their tenants’ rents by more than 5% annually, as part of a larger government effort to reduce housing costs.
The president asked Congress to pass legislation that would prohibit corporate landlords who raise rents by more than 5% annually from taking advantage of accelerated amortizations.
The proposed rule would apply to landlords with more than 50 units, which would cover more than 20 million units or about half of the nation’s rental market, according to an administration fact sheet.
“Families deserve affordable housing – it’s part of the American dream,” Biden said in a statement. “Rent is too high and buying a home is out of reach for many working families and young Americans after decades of failure to build enough homes. I am determined to reverse this.”
“Today, I am sending a clear message to corporate landlords: If you increase rents by more than 5%, you stand to lose valuable tax incentives,” he continued.
“While the previous administration gave special tax breaks to corporate landlords, I am working to lower housing costs for families,” Biden added. “Republicans in Congress should join Democrats in passing my plan to lower housing costs for Americans who need help now.”
The rent cap, which would be in effect for two years under Biden’s proposal, is intended to “serve as a bridge until more housing units are built,” National Economic Advisor Lael Brainard told reporters on a conference call Monday.
To avoid discouraging the supply of new housing, it would not impact new construction or units that have undergone substantial rehabilitation, Brainard added.
The Biden administration is also supporting agencies to repurpose federal land to build more affordable housing. The Bureau of Land Management (BLM), the United States Forest Service (USFS), and the United States Postal Service (USPS) have announced plans to repurpose extra land or property for housing.
“My administration is also taking steps to cut red tape and repurpose public land to build more affordable homes — including thousands of new homes in Nevada — and announcing new grants to build thousands of homes from Las Vegas to Syracuse,” Biden said.
The president is currently in Las Vegas, where he will deliver remarks at the NAACP National Convention and UnidosUS Annual Conference.
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