The Mortgage Bankers Association (MBA) said on Monday that reported plans by President Joe Biden to potentially introduce a cap on rent increases would struggle to achieve its goal of making housing more affordable.
On Monday, The Washington Post and The Associated Press reported that Biden plans to announce a 5 percent limit on annual rent raised by landlords as part of efforts by his administration to mitigate against high housing costs.
Last week, Biden seemed to allude to the plan during a press conference at the NATO Summit in Washington, D.C.
“If I’m reelected, we’re going to make sure that rents are kept at 5 percent increase,” he told reporters.
But lenders suggested that such a move may discourage more home building which they believe would be the key towards a more affordable rental market.
“Increasing the supply of affordable rental housing nationwide—not politically-motivated and self-defeating rent control proposals floated during election campaigns—is the best way to alleviate affordability constraints for renters,” MBA’s President and CEO Bob Broeksmit said in a statement.
Broeksmit went on to say that rent caps may have the effect of limiting supply and amid high demand for homes could lead to escalating prices.
“There are endless examples in localities in America and around the world that prove that rent control is a counter-productive policy idea that ultimately harms renters by distorting market pricing, discouraging new construction, and degrading the quality of rental housing,” he said in the statement. “While the odds are stacked against this proposal ever passing Congress, a federal rent control law would be catastrophic to renters and our nation’s rental housing market.”
Newsweek contacted the White House for comment via email on Monday night.
Housing costs have emerged as a key concern for Americans as the housing market hit by elevated interest rates and expensive prices has disrupted the real estate market. Would-be first-time homebuyers are struggling to afford to buy homes at a time of 7 percent mortgage rates. Meanwhile, the prices for homes are at record highs. This dynamic has escalated competition in the rental market, helping to push up prices.
Rent went up in June by 3.5 percent compared to a year ago to a little over $2,000 at the national level, according to Zillow. Since COVID, meanwhile, rental prices have soared nearly 33 percent, the real estate platform pointed out.
“Rents are up from year-ago levels in 48 of the 50 largest metros,” Zillow pointed out.
An ‘Apartments for Rent’ sign hangs in front of a building on December 06, 2022, in Miami Beach, Florida. Rental prices have gone up since the pandemic. An ‘Apartments for Rent’ sign hangs in front of a building on December 06, 2022, in Miami Beach, Florida. Rental prices have gone up since the pandemic. Joe Raedle/Getty Images
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Source link
About the Author
Omar Mohammed
This author has not added a biography. Meanwhile Omar Mohammed has contributed 82 posts.
Click here
to view them.
