With the disparity between rent and growth, the U.S. has become a rent-burdened nation for the first time in the past 20 years. To combat the issue, the Biden-Harris administration has released a “Blueprint for a Renters Bill of Rights” designed to encourage a fair rental market and relieve some pressure off renters.
The Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC) have been given the responsibility of detecting unfair measures and practices that are preventing tenants from maintaining housing. The Federal Housing Finance Agency (FHFA) has declared that it would be looking into limits on rent increases and tenant protection options through a transparent process. On the other hand, the U.S. Department of Housing and Urban Development will share rules regarding certain owners of rental assistance and public housing properties to provide a notice of 30 days before terminating a lease for no payment.
What Is the Renters Bill of Rights?
The Renters Bill of Rights is a blueprint laid out by the Biden-Harris Administration to help with policy decisions. It offers the following protection to tenants:
Clear & Fair Leases
Safe, Quality, & Affordable Housing
The Right to Organize
Education, Enforcement, & Enhancement of Renter Rights
Eviction Prevention, Diversion, & Relief
Will it Impact Rent Control?
Earlier, voters had chosen rent limits and rent control as the solution to the housing affordability crises. However, until now, the Biden-Harris administration has not established federal rent control, and modern lawmakers have commented that this is an insufficient solution.
Almost 50 progressive lawmakers have written to Biden to request him to direct the FTC to establish regulations clearly defining excessive rent increases that affect businesses unfairly and enforce action regarding unjust rent overcharging practices.
Public opinion usually favors rent control in housing affordability emergencies, even though it is not a long-term solution. It can help with short-term displacement but impacts housing affordability and availability in the long run. Rent control, as discovered by the National Apartment Association, also disincentivizes the construction of new rental properties and prevents the maintenance and rehabilitation of properties. In some cases, it can allow misallocation of housing to renters where renters are discouraged from downsizing even if they require considerably less space which affects housing availability and is harmful to the homeless. Even 81% of top economists agree that rent control negatively affects affordable housing in busy cities like San Francisco and New York.
The Issue at Heart
Although the consumer price index shows inflating rent prices, it is a delayed indicator of real rent costs. Rents are falling; the steepest figure was seen from October to November 2022 on Zillow in over seven years. Moreover, new rental units are also forecasted to be available in 2023 during the pandemic.
Nevertheless, rents have increased by 8.5% from last year, and the usual tenant is cost-burdened. Even with a large supply of apartments, rents are expected to stay high and keep increasing yearly. Therefore, the intervention of the Federal Government is necessary for low-income Americans to have access to affordable housing. Nevertheless, rent control is a temporary solution, and a large stimulus package will only later serve as a driver for further inflation.
The best solution to the problem proposed by National Multifamily Housing Council is to provide subsidies for builders/remodelers and renters of affordable housing properties. It will allow access to reasonably priced, safe, and quality housing to low-income people without causing rents to increase drastically after some time.