Rosalind Evans
In a significant move to address the escalating housing affordability crisis in the United States, the Biden administration has introduced a new rule to cap rent increases in particular affordable housing units. This policy, announced on April 1 and now in effect, restricts rent hikes to a maximum of 10% annually for units financed through the Low-Income Housing Tax Credit (LIHTC) program. As the nation’s largest federal affordable housing initiative, the LIHTC program encompasses an estimated 2.6 million rental homes, offering millions of American families a crucial lifeline.
Tenant advocates have lauded the administration’s decision as a pivotal step toward housing stability. “The rent is still too damn high, but this cap will provide stability to more than a million tenants,” proclaimed Tara Raghuveer, the director of the National Tenant Union Federation. This perspective underscores the critical relief the cap is expected to bring to vulnerable populations, including seniors, families with children, and individuals with disabilities.
Conversely, industry representatives like Bob Broeksmit, President and CEO of the Mortgage Bankers Association, have criticized the move as counterproductive. Broeksmit argued that rent control measures historically lead to adverse outcomes, including deterred construction, market distortion, and deteriorated rental housing quality, exacerbating rather than alleviating the housing affordability crisis.
Renters in the LIHTC program can verify their eligibility for the new cap through various means, including their lease agreements, state housing agencies, or the National Housing Preservation Database. Implementing the cap aims to combat unreasonable rent increases and ensure that the most economically vulnerable citizens can maintain their housing without fear of displacement.
For tenants encountering rent increases beyond the stipulated cap, resources such as local free legal services and Justshelter.org are available to provide assistance and ensure landlords comply with the new guidelines.
While the Biden administration’s rent cap policy has ignited a spectrum of opinions, its primary objective is to fortify the safety net for millions of Americans struggling with housing affordability. By implementing this cap, the administration takes a decisive step towards stabilizing the housing market for low-income families, albeit amidst ongoing debates over the best approaches to solve the nation’s housing challenges.
