[Rents are too high. Joe Biden should issue an executive order to
lower them]
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JOE BIDEN COULD SINGLEHANDEDLY LOWER RENTS FOR THE MILLIONS CRUSHED
BY THEM  
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Fran Quigley
December 3, 2022
Jacobin
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_ Rents are too high. Joe Biden should issue an executive order to
lower them _

Residential apartment buildings are seen on July 26, 2022 in New York
City., (Spencer Platt / Getty Images

 

The United States’ housing and inflation crises are deeply connected
— and Joe Biden isn’t doing much about them.

“As of now, the Biden administration is dangerously silent on the
single biggest line item in Americans’ budgets: their rent,” says
Tara Raghuveer, a Kansas City–based tenant advocate and director of
the People’s Action Homes Guarantee campaign. Her group brought one
hundred tenants to both the White House and Congress last month,
calling for an executive order that would slow the skyrocketing
increases in the cost of rent.

Tenant, housing, and legal advocacy groups have even drafted the order
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for Biden to sign. It calls for rent control in all properties backed
by federally guaranteed mortgages and in all cities and states that
apply for federal block grant funding, along with investigations and
prosecutions for rent price gouging as an unfair and deceptive
practice prohibited by federal law. Together, these provisions would
impact tens of millions of US renter households.

Fast and dramatic action is called for, as rents have risen to
historic levels. Rents went up nationally 14
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percent
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2021 [[link removed]]
and over 20 percent in several cities. Continued increases this year
pulled the average US rent above $2,000 per month
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first time. Even before these hikes, the vast majority of renter
households with extremely low incomes were paying over 50
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their income [[link removed]] for rent. One in six
tenants
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report being behind on their rent and evictions are rising
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Meanwhile, corporate landlords are tightening their grip on the
nation’s rental market. Institutional owners — corporations or
limited liability companies — now own the majority of all U
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rental units
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and over 80 percent of properties with twenty-five or more units. They
are well aware of what that market control lets them get away with.

 

Bob Nicolls, CEO of one of America’s top corporate landlords,
Monarch Investment and Management Group, told investors in September
2021 that big rent hikes were coming. “We have an unprecedented
opportunity . . . to really press rents,” Nicolls said
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“Where are people going to go? They can’t go anywhere.”

Sure enough, the top-ten publicly traded corporate landlords, many of
whom share access to anticompetitive algorithms
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to keep rents artificially high, collectively saw their profits rise
by 57
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percent
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last year.

With housing costs being far and away the largest expense for
[[link removed]]US
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key driver of inflation, which midterm voters cited as their top
concern
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But the Biden administration has done virtually nothing to control the
cost of rent. The American Rescue Plan and the Infrastructure
Investment and Jobs Act did not lower housing costs, and the Inflation
Reduction Act stripped out the housing investments in the doomed Build
Back Better legislation. Biden’s proposal to increase housing supply
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is a worthy long-term goal, but does nothing to relieve the
emergencies being experienced by millions of households every month
when the rent comes due.

An executive order would fill that gap. The order proposed by
People’s Action and collaborating organizations would include:

* The Federal Housing Finance Agency mandating that tenants in all
properties financed by government-backed mortgages be protected by
rent increase regulations that cap annual increases at 1.5 times the
Consumer Price Index or 3 percent, whichever is lower. This would
apply to over 12 million rental units
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nearly 30 percent of US rental stock.
* The Department of Housing and Urban Development requiring that
states and cities applying for coveted Community Development Block
Grants institute similar rent control.
* The Federal Trade Commission adding excessive rent increases to
its list of unfair and deceptive practices that could lead to
enforcement actions.
* The US Department of the Treasury clarifying that good cause is
required for eviction and nonrenewal of leases in properties funded by
the Low-Income Housing Tax Credit program.

Aggressive federal action would reflect the changed landscape for
tenants who once dealt with mom-and-pop local landlords, now forced to
confront the power of national and even multinational corporations.

“Increasingly the real estate market is run by institutional
investors who have consolidated the market,” Raghuveer says.
“These are multistate or even multinational actors that can’t be
effectively regulated by local or state policy alone. “

These corporate landlords turn to the federal government to prop up
their operations. “The business model of many of these real estate
investors is to get government-backed mortgages through Fannie Mae or
Freddie Mac [[link removed]], or a
tax credit from the Treasury Department or support from HUD
[Department of Housing and Urban Development] or the Department of
Agriculture,” Raghuveer says. “So we see it as an absolute
necessity that the federal government actually use those public
subsidies and financing as leverage to increase the power position of
the tenant relative to the landlord.”

The pressure on Biden to act is following the blueprint of successful
recent campaigns pushing for executive action on student debt
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and drug policy
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And the campaign has the support of national legal organizations and
experts who argue that the president has the legal authority to take
major steps to ease the housing crisis.

“Millions of tenants around the US live under the constant threat of
eviction and displacement,” says Brandon Weiss, a housing law
professor at American University Washington College of Law. “This
draft executive order contains a number of common sense provisions
that would provide them with some basic legal protections.

“While landlord tenant law has traditionally been addressed under
state and local law, there is significant authority and precedent for
the federal government to regulate this area as well,” Weiss says.
“For example, as the draft executive order proposes, there is ample
room for a more expansive approach to how the US Department of Housing
and Urban Development interprets the duty to affirmatively further
fair housing under the Fair Housing Act.”

Precedent for federal housing regulation includes the federal rent
control imposed on 80
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War II, recent pandemic protections
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for tenants in housing with government-backed mortgages, and a host of
longtime anti-eviction and pricing requirements on federally
subsidized housing. So it is well within Biden’s power to issue an
executive order as an overdue response to the will of a worried
public: August polling by Data for Progress
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showed a majority of US voters support Biden using his executive power
to address the housing crisis, with a full 76 percent of Democrats
calling for presidential action.

That level of public support comes as no surprise to Raghuveer or the
coalition of more than 250 organizations calling for executive action.
“The rent is just too damn high,” says Raghuveer. “It’s been
that way for decades, but this is a new level of crisis now.”

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* Housing; Federal Rent Control; Landlord Subsidies;
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