Biden must take on the cost of rent next — and urge Congress to act

In the 2022 midterm elections, voters reported that inflation was the most important issue to them, but no politician can expect to make headway against inflation without addressing the cost of one basic human need: housing. Because rising housing costs are the biggest driver of inflation and one-third of Americans rent their home, we cannot meaningfully address inflation without taking on soaring rents, which economic historian Adam Tooze has called “the core of the core of U.S. core inflation numbers.”

For the first time in the country’s history, the national median rent topped $2,000 this year. Over the past 12 months, rents rose just over 7 percent, the largest increase in 40 years. Many cities have seen rent increases in the double digits during the same period. In one survey, half of renters under 35 reported that their rents had increased in the past year. Although homeownership is still a goal for many young people, it is increasingly unattainable when high rents hamper their ability to save for a down payment.

President Biden has options to influence rents that are too high. He can use his executive authority to provide relief to renters by linking federal funding to keeping rents low, and he can order the Federal Trade Commission (FTC) to investigate and crack down on landlord price-fixing. He must work with Congress to address the growing control of housing by private equity firms, provide transparency about who owns what properties, and substantially increase federal funding for affordable housing.

The rental crisis is bad for democracy; evictions have been shown to depress voter turnout in neighborhoods with high rates of displacement. Taking action on rents would be smart politics: Young people who turned out for Democrats in November and many Black and Latinx voters are disproportionately renters.

Our rent affordability crisis has hit people of color particularly hard. Nationally, over half of Black and Latinx households rent their homes, compared to just 28 percent of white households. Forty percent of homeless Americans are Black, compared to 13 percent of the U.S. population. Research in Washington state found that eviction rates among Black and Latinx adults were almost seven times higher than the rate for white adults in the state’s largest population centers.

Predictably, the combination of rapidly rising rents and the phasing out of COVID eviction moratoriums and emergency rental assistance has resulted in a growing eviction crisis. Yet many corporate landlords report their largest profits ever.

The Homes Guarantee Campaign just released a draft executive order outlining how Biden can take on high rents without Congress. A key proposal is to make affordable rent a condition for federal housing grants, loans and subsidies. Right now, the Federal Housing Finance Agency finances government-backed loans to private equity firms that acquire properties, raise rents and evict longtime tenants.

The campaign is also urging Biden to establish a federal interagency council on tenants’ rights to coordinate government action on rents and to push the FTC to investigate price gouging and unfair fees targeted at renters.

The rise of having private equity landlords and large investors in the housing market over the past decade poses another major challenge to affordable rents. These firms increasingly have consolidated their presence in the housing market, from single-family homes to rentals to manufactured homes. Our research has found that private equity landlords tend to raise rents and fees, skimp on property upkeep, and move aggressively to evict renters.

Ultimately, Biden must work with Congress to pass legislation that will close tax giveaways for large investors and change the tax code to incentivize affordable, stable housing for all Americans. We need a national landlord registry that provides names behind the faceless LLCs that own so much of the country’s rental buildings, so that renters can know who owns their home and what government subsidies they may have received.

Biden also must work with Congress to substantially increase funding for permanently affordable housing. Voters overwhelmingly supported state and local initiatives to build more affordable housing in the 2022 elections. Yet, Biden’s largest piece of legislation — the Inflation Reduction Act — did not include new funding to construct affordable housing. It’s time to correct this missed opportunity by passing legislation to boost federal funding for affordable housing construction and maintenance throughout the country.

Federal policy has for too long neglected the third of the U.S. population that rents, allowing costs to balloon to unaffordable levels and to drive inflation. It will take a concerted effort from the president and Congress to bring relief from sky-high rents.

Caroline Nagy is senior policy counsel for housing, corporate power and climate justice at Americans for Financial Reform. Follow her on Twitter @carolinenudge.