President Joe Biden has proposed a plan to cap annual rent increases at 5% nationwide, aiming to provide relief to renters struggling with high housing costs. The plan, expected to be announced on Tuesday, would disincentivize landlords from raising rents more than 5% per year by removing tax benefits. The proposal would only apply to landlords who own more than 50 units and would not pertain to units that have not yet been built.

Key Points:

The plan would cap annual rent increases at 5% nationwide The proposal would remove tax benefits from landlords who increase rent more than 5% per year The plan would only apply to landlords who own more than 50 units The proposal would not pertain to units that have not yet been built The plan would need to be approved by Congress

Reactions:

The National Apartment Association (NAA) has denounced the plan, stating that rent control is a "failed policy" that does not work and would exacerbate the affordable housing crisis. The Mortgage Bankers Association (MBA) has also expressed concerns, saying that the plan would discourage more home building, which is the key to a more affordable rental market. Some experts argue that the plan would provide short-term relief to renters while new construction comes to the market.

Background:

The median U.S. asking rent was $1,653 in May, the second consecutive monthly increase and the highest level since October 2022. The proposal is part of the administration's efforts to address high housing costs and mitigate the impact of inflation.

Next Steps:

The plan is expected to be announced on Tuesday and would need to be approved by Congress. The proposal would likely face opposition from the real estate industry and some lawmakers.