- The Biden administration is exploring how to tackle rising rental costs as the US faces an affordable housing crisis
- Washington Post reports that the administration will announce a cap on rent increases for affordable housing on Monday
The Biden administration will announce a 10 percent cap on how much rent can increase in some affordable housing, according to a new report.
The move comes as rising rents are one of the biggest contributors to ongoing inflation, as affordable housing remains a long-standing problem in the United States.
According to the Washington Post, this move would limit the amount property owners can increase rent annually if they are part of a low-income housing tax credit program.
The new regulations are expected to be announced on Monday and economists estimate the cap could apply to more than a million homes, the report said.
The Washington Post reports that the Biden administration will announce a cap on rent increases for affordable housing of 10 percent on Monday (FILE photo)
To receive the low-income tax credit, developers already must follow a series of affordability rules, including that at least 20 percent of project units be occupied by renters with incomes at or below 50 percent of the area median income.
It also requires that 40 percent of units be occupied by renters with incomes that average no more than 60 percent of the area median income.
The move comes just weeks after President Biden proposed a series of new housing initiatives during his State of the Union, largely in the form of tax credits.
During the speech, the president also called on Congress to pass a plan to build and renovate two million affordable housing units and lower rents.
During his State of the Union address on March 7, President Biden called for the construction of more affordable housing to help bring down rents. He also praised the reduction of “red tape” so builders can get financing to build 1.7 million homes
The United States faces a long-term affordable housing crisis.
No state across the country has enough rental housing for low-income renters, according to a report from the National Low Income Housing Coalition.
Overall, the U.S. faces a rental housing shortage of 7.3 million for extremely low-income renters.
The Biden administration also recently released an economic report documenting how nearly a quarter of all renters now spend more than half of their income on rent and more than 30 percent of renters spend more than 40 percent of their income on rent.
The reported cap on affordable housing rent increases would be the latest in a series of steps the Biden administration has taken in an effort to help address housing shortages by both boosting the supply of affordable housing and promoting transparent rental markets.
Some steps include expanding funding for affordable housing associations, as well as addressing zoning reforms.
In 2022, the government released a housing supply action plan to help alleviate housing costs over time. It called for closing the housing supply gap in five years.