Today, President Biden announced a proposal that requires corporate landlords to cap rents at 5 percent or risk losing federal tax benefits for two years as part of a larger plan to address housing costs. This historic proposal is a result of years of tenant organizing and, most recently, calls from thousands of renters and advocates for the White House to enact national rent control through the Federal Housing Finance Agency. 

A federal rent cap reflects what we’re seeing across the country: increasingly, cities, counties, and states are turning to rent stabilization — recognizing its centrality to addressing the housing crisis and keeping people in their homes. Communities are grappling with record-high rent gouging and urgently need more elected leaders to step up and make it right. 

The proposed 5 percent cap is a meaningful annual cap that will stop predatory and egregious rent increases for millions of families. This is especially impactful for lower-income households who are more likely to rent their homes and have seen their earned income growth drop in the last 20 years.

President Biden’s proposal also recognizes that the only new construction that should be considered for exemption is housing that is yet to be built – not housing that people already call home. This proposed exemption is important in pushing back against efforts by the real estate lobby to weaken rent regulation. The real estate lobby has spent millions of dollars aimed at convincing elected officials that they need to exempt decades of housing construction in order to make rent stabilization viable which, in some cities, has led to exemptions for buildings that have already been around for 20 years.

Because this policy is responsive to these critical issues facing cities and states across the country, we strongly believe that it is needed for a much longer period than the two years being proposed. Housing cost-burden and instability aren’t short-term problems, and rent regulations aren’t a short-term strategy to stabilize rents while units are being built. 

We also recognize that this policy does not address the reality that we cannot build our way out of the housing crisis, and that new housing supply in and of itself will not necessarily address the needs of cost-burdened households. Despite years of record-level multifamily housing construction, there is nowhere in the United States where a full-time worker earning the federal minimum wage, or the prevailing state or local minimum wage, can afford a modest two-bedroom rental home at fair market rent. 

For those households earning minimum wage and struggling to keep a roof over their heads, the idea of being able to afford the luxury apartment being constructed down the street is as far-flung as the idea that they can wait for decades for cheaper housing to filter down. Our housing crisis is happening now, and we cannot wait for the private market to deliver results for the tens of millions of cost-burdened renters in this country — it was never designed to do so. 

Most importantly, President Biden’s proposal is simply an idea at this stage, and must be realized in order to help households across the nation. It requires legislative action, which will be hard-fought with our current Congress. The President must leverage the power that the Federal Housing Finance Agency holds over federally-backed properties — the same power being exercised to require 30-day notices and 5-day grace periods — and enact rent stabilization now for the millions of renters living in those homes.