Biden-Harris Rent Control Proposal Could Worsen Housing Crisis

Biden-Harris Rent Control Proposal: An Ineffective Solution

The Biden-Harris administration's goal of introducing a nationwide rent cap of 5% for large landlords may have unintended consequences and worsen the existing housing shortage. By restricting rent increases, this plan discourages necessary investment in housing development and threatens property tax revenues while neglecting to address the root causes of the housing crisis.

Economic Fallout of Rent Control Measures

• Historically, rent controls in cities like New York and San Francisco led to decreased rental investment.
• Housing availability diminished at all price levels, pushing more residents toward homelessness.
• The Biden-Harris proposal includes restricting depreciation write-offs, potentially stifling investment in existing properties.

Impacts Beyond Housing

This rent control measure could also curtail labor mobility, complicating relocation efforts as housing costs rise. Similarly, current residents may prefer to remain in rent-controlled units, resulting in fewer vacancies for newcomers. Further, declining property values may diminish local governments' tax revenues, impacting essential services like education and public safety.

An October 2020 Senate Budget Committee report highlighted failures in existing federal housing programs, with over $50 billion spent yet 500,000 homeless individuals still counted in a single night. Rather than reforming these systems, the proposed rent cap merely scratches the surface, serving as a political gesture without substantial backing.

Pathways to Affordable Housing

The critical solution lies in evidence-based policies that bolster housing supply. Policymakers need to reduce convoluted regulations, adjust zoning laws, and permit development initiatives to encourage new construction. Rent control has consistently failed to create ample housing or accessibility.