Guest column by Derek Ramsay, KCRAR Senior Vice President for REALTOR® Advocacy & Commercial Services
The Biden administration recently proposed what is effectively a nation-wide 5% cap to rent increases. The proposal would take away the accelerated depreciation tax provision from housing providers with 50 or more units who raise rents by more than 5% per year. The program would be in place for two years and only apply to existing properties.
While both Kansas and Missouri have state laws on the books prohibiting local governments from establishing rent caps, proposals such as this continue to pop up in cities, counties and states across the country. They jeopardize the financial solvency of rental communities, lower the quality of housing stock, limit housing choices, and disincentivize new development. Economists from across the political spectrum agree—rent control ultimately worsens challenges to affordable housing in communities and ignores the real reasons those challenges exist.
NAR has joined a broad coalition of 19 housing provider and lender organizations committed to addressing America’s housing affordability crisis. In a letter to the administration, the coalition states that “decades of academic research from across the United States and around the world clearly show that rent control reduces the supply of available housing and fails to target those renters most in need, while simultaneously harming other residents and the communities they reside in.”
Recently, KCRAR co-hosted a Housing Roundtable Listening Session at which FHFA Director Sandra Thompson and Congressman Emanuel Cleaver heard directly from landlords on the front line of the affordability crisis. These housing providers explained to Director Thompson and Congressman Cleaver the harm that programs like rent caps, source of income laws, good cause evictions and many others negatively impact both landlords and tenants and decrease the overall affordability of housing in cities across the country.
We were also pleased to be joined at the listening session by NAR Chief Economist Lawrence Yun, who used hard economic data to drive home the need for the creation of more affordable and attainable housing at all price points across the country.
Fortunately, the rent cap proposal would need congressional approval, which makes the idea DOA in the House and Senate. However, REALTORS®, landlords and all housing advocates must remain diligent to ensure harmful proposals like this are not allowed to negatively impact affordability for all.
Check out the Housing Solutions Coalition for additional information on solutions to create affordable housing for all.
Federika Morado • August 12, 2024 at 6:47 am
Perhaps tent caps could help the renters which , in turn, could help the investors bu providing wider pools of renters snd more stable occupancy. I hear of renters, quite regularly, who provide their own upkeep, including paying professionals for repairs of owner’s property and professional or self maintenance ( at their own expense) only to have their rent raised year after year. No allowances to tenters for using their own time and money on the owners’ property makes for very dissatisfied renters.
How does that situation help either party?