(NewsNation) — President Joe Biden has proposed abolishing tax breaks for corporate landlords who raise rent by more than 5 percent annually.
Corporate landlords, under the proposal, are termed as those with more than 50 units.
Biden believes the measure will make housing more affordable for the everyday American, a red-button issue ahead of November’s election.
What did Biden say?
In a statement Tuesday, Biden took aim at the Republican Party while making a point as to why his proposal would be beneficial.
“Families deserve housing that’s affordable — it’s part of the American Dream,” Biden said.
“Rent is too high and buying a home is out of reach for too many working families and young Americans, after decades of failure to build enough homes. I’m determined to turn that around.
“While the prior administration gave special tax breaks to corporate landlords, I’m working to lower housing costs for families,” Biden added.
How will it be achieved?
In this attempt to make housing more accessible for Americans, the Biden administration plans, should Congress pass it, to build “thousands of homes from Las Vegas to Syracuse.”
Specifically, the plan would be for 15,000 homes to be built in Nevada. This would involve repurposing acres of public land for new housing.
Skeptics of the proposal
There are many who contend the Biden-Harris proposal is lacking in substance, perhaps merely a vote-getting ploy.
The National Association of Relators said the scheme is erroneous.
“Price controls may seem appealing, but they have backfired on local governments and harmed the people we need to help the most,” they said in a statement.
“Developers are reluctant to build in areas where the government imposes rent controls on new buildings.”
Similar sentiments were echoed by The Mortgage Bankers Association: “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.”
Wilson Geno, the National Multifamily Housing Council president, told Bloomberg that Biden’s plan was fundamentally flawed.
“This whole idea that they’re going to cap rents for two years, just for existing property, but it’s not going to apply to any future property because somehow they don’t want to impede future development is nonsensical,” Géno told Bloomberg.
“It’s absolutely going to impede future development because they’re seeing what’s happening to existing property.”
Despite potential construction in Nevada, many argue the removal of tax breaks will cause the opposite effect and only create future problems.
“Exempting new construction will do nothing to change this, making clear that long-term investments in housing can be made uneconomic retroactively,” David M. Dworkin, the National Housing Conference president, told Bloomberg.
Proponents
While many nongovernmental organizations see flaws in the proposal, the Biden administration is speaking glowingly about what it could do for Americans.
As part of creating more affordable housing, the U.S. Forest Service will lease its own land for workforce housing in Colorado and Idaho.
“This is a crucial component of our agenda,” Neera Tanden, Biden’s domestic policy adviser, told media last week.
“The federal government is the biggest landowner in the country, and some of its land is currently underutilized or entirely unused.
“President Biden is asking federal agencies, from the Department of Interior to the Department of Defense, to identify opportunities to repurpose surplus property to build more affordable housing.”