The Biden-Harris administration has put forward a “Blueprint for a Renter’s Bill of Rights” and introduced new measures in order to create a fair rental market. The high demand for housing in 2021 resulted in rents peaking in February 2022, with a year-over-year increase of 17.1% (according to Zillow). This has left the nation with a rental burden, prompting the Biden-Harris administration to act with new actions.

The Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) have been tasked with discovering any unfair practices that make it difficult for tenants to find or keep housing. In response, the Federal Housing Finance Agency (FHFA) has declared that it will look into the possibility of limiting rent increases and other protections for renters in a clear and open process. Additionally, the U.S. Department of Housing and Urban Development is set to put out proposed rules that would require certain owners of rental assistance properties and public housing authorities to give tenants thirty days notice before terminating their leases due to nonpayment.

The administration has requested that state and local governments, in addition to the private sector, join in the effort to enhance the circumstances of renters.

The Wisconsin Housing and Economic Development Authority (WHEDA) and the Pennsylvania Housing Finance Agency (PHFA) have established a cap of 5% on rent increases for subsidized affordable housing.

A Tenant’s Right to Know

A set of entitlements is established here for renters to be aware of and to ensure their rights are respected.

The Biden-Harris Administration has established a “Blueprint for a Renter’s Bill of Rights” that will be employed to inform policy decisions. Included in the document are the following tenant rights:

  • “Secure and High-caliber Affordable Accommodations”
  • “Just and Transparent Agreements”
  • “Instruction, Enforcement, and Advancement of Tenants’ Privileges”
  • “The Ability to Unite”
  • “Barring Evictions, Ways to Avoid, and Assistance”

Could Rent Control Be Implemented?

In several states, voters already approved restrictions on rent increases and rent control as a means of addressing the housing affordability crisis before the Biden-Harris administration implemented new measures. Some progressive lawmakers are unsatisfied with the new actions, as they do not introduce federal residential rent control.

In a recent letter to President Biden, 50 progressive legislators suggested that he ask the FTC to “formulate new regulations determining excessive rent increases as an unfair commercial practice and to implement action against rent gouging.”

In a crisis of affordability in regard to rent, public opinion often supports rent control. However, multiple studies have demonstrated that rent control has a long-term negative effect on housing affordability, even if it helps with displacement in the short term. The Brookings Institution conducted a study that reached this conclusion. Additionally, a Stanford study indicated that rent caps in San Francisco caused landlords to reduce the rental housing supply by 15%, which eventually caused an increase in market rents.

The National Apartment Association has made it clear that rent control reduces the construction of cost-effective rental units and fails to motivate property owners to keep up with maintenance and repairs. Additionally, according to a report from the National Bureau of Economic Research, rent control leads to an improper allocation of housing, discouraging families from downscaling when they need to, thus creating an even greater lack of housing for the homeless. Additionally, the National Multifamily Housing Council has noted that rent control widens the social gap and encourages housing discrimination.

Economists are known to have diverging opinions, but a poll of economists from leading institutions revealed that an overwhelming majority (81%) did not agree that rent control had positively impacted the availability and standard of low-cost housing in cities such as New York and San Francisco.

The Core of the Problem

The consumer price index presents a lagging picture of rent inflation, however the Zillow Observed Rent Index has already detected a fall in rents that is the most dramatic in seven years. Furthermore, it is predicted that 565,200 new rental units are to be added to the market in 2023, the highest amount in many years. This surge of construction was caused by the pandemic, which had stalled construction activity.

Despite rents increasing by 8.4% from last year, the average renter is still struggling with the cost of living. Even with more apartments being available, rents are still anticipated to be higher year-over-year. If the economy does not recover and the federal government does not take action, the lack of inexpensive housing could have a dire impact on low-income Americans.

In certain cases, government interference in the economy can assist particular groups in the near future, however it can be damaging for the whole population in the long run. Not intervening, nevertheless, can be unkind. Allowing people to go through hardship for the sake of the larger economic situation has moral implications. This is why the national government agreed upon a huge economic stimulus that would become one of the main causes of inflation.

Rent control can be a tough thing to undo, especially if it has been in place for a long time. Taking away the control may require another solution that would keep tenants in rent-controlled buildings from facing a sudden, drastic rise in rent. The National Multifamily Housing Council argues that direct subsidies to both renters and the developers of affordable housing complexes are the best way to ensure safe, affordable housing is accessible to those with lower incomes.

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