What To Know About US President Biden’s Rent Hike Cap

Estimated reading time: 3 minutes

The Problem

Housing unaffordability isn’t just a problem for prospective homebuyers anymore. High interest rates and record home prices are creating high demand for rental units, driving up rent as well. But the White House is hoping to change to limit this.

President Joe Biden proposed a rent hike cap Tuesday, hoping to bring stability to the rental market and prevent sharp annual price hikes for renters.

The Proposal

The national median price of an apartment in March 2024 was nearly $2,000, up more than 20% from five years earlier, according to Rent.com’s April Rent Report. While rental pricing varies from market to market, the rising rates have impacted many Americans, with the number of cost-burdened renters in the U.S. currently sitting at a record high.

President Biden’s proposal would eliminate a key tax write-off for certain landlords raising rents by more than 5% annually, effectively discouraging them from raising rents too sharply. The proposal would only apply to existing rental units to avoid discouraging new developments, and only affect landlords with more than 50 units.

If enacted, the proposal would go into effect this year through 2026, and stand to stabilize pricing for 20 million rental units, per the White House’s fact sheet.

The Big Picture

The White House has also taken steps to eliminate rental junk fees and crack down on rental pricing collusion among landlords.

But critics of Biden’s latest proposal insist that rent caps do not address the main issue of housing unaffordability: low inventory in the for-sale housing market.

In fact, the non-profit National Housing Conference argues the cap could tighten the housing supply further by discouraging landlords’ investments and encouraging tenants in existing units to stay put.

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