After a year that saw rapid increases in housing costs, President Biden announced a new ‘Renters Bill Of Rights’ Wednesday, as a growing number of Democrats are pressuring the White House to impose sweeping housing reform, including an unprecedented nationwide rent control.
Last Wednesday, President Biden rolled out what he’s calling the “Renters Bill of Rights” — with a series of measures the White House says will expand tenant rights and improve rent affordability.
While it’s not technically binding and will never pass into a federal law, the measure will direct the Consumer Financial Protection Bureau and other federal agencies to begin collecting information that will help identify practices which in their words, unfairly keep renters and applicants from housing.
One example they gave was the use of tenant background checks, which Democrats have long said disproportionately impact minority tenants. Background checks are, however, essential in keeping neighborhoods safe from past criminal activity and a landlords first right of defense for doing so.
The White House also instructed the DOJ to investigate potential anticompetitive information sharing among rental companies.
Context: There are 44 million households in America renting right now, and rental prices have skyrocketed since 2020. They went up 17.6% in 2021 and another 3.8% last year.
We’ve seen growing calls from the party’s far left base to institute a nationwide rent control policy. That all culminated this month when 50 Democrat Congress members, led by NY Congresswoman Alexandria Ocasio-Cortez and Massachusetts Senator Elizabeth Warren, sent a letter to the White House calling on President Biden to use the Federal Trade Commission and other government agencies to implement rent control at a federal level.
The letter calls on Biden to lay out specific regulations defining just how much landlords are allowed to increase rent each year — which would go well beyond anything we’ve seen before at the federal level.
Remember: Rent control policies essentially control what landlords can charge and how much they can increase rent prices each year.
We’ve already seen cities like New York, San Francisco and Los Angeles implement such policies, while states like Oregon have passed laws that cap rental increases at seven percent annually. There is some precedent here - but federal action would be a huge step. Also keep in mind that (not by coincidence) these are the same states facing enormous homeless and housing crisis, while also burdening homeowners with the highest property tax rates in the country – clearly, the idea and the precedent is a failure entirely.
Critics, mostly those on the Right, say such measures consistently result in higher rent prices over time, as they often disincentivize new construction and can lead to widespread inefficiencies.
For example, in 2021, St. Paul, Minnesota passed a rent increase cap of 3% annually, and in the following six months, new building permits on rental housing dropped 84%.
But not everyone on the Left is in favor of the idea. Numerous Biden officials have said the President does not have the authority to pass a nationwide rent control policy, and that such a measure would almost certainly be struck down in court.
- Prior to the market boom covid brought to the Savannah market and the southeast in general, rent increases were an average of 12% year over year.
- In the last 3 years, they were up more than 33%, which is nearly 3x the state average and up 21% in 2021/22.
- Over the last 3 years median rents for a 3 bedroom home in the metropolitan area of Savannah have gone up 48%.