How the Biden administration plans to tackle high rents and protect renters

On Wednesday, the Biden administration unveiled actions it plans to take to protect people living in rental housing, which accounts for about 35% of the U.S. population, in over 44 million households.

The executive actions correspond with a “White House Blueprint for a Renters Bill of Rights” that the administration released on the same day. The blueprint offers a set of principles to “drive action by the federal government, state and local partners, and the private sector to strengthen tenant protections and encourage rental affordability.”

Before the COVID-19 pandemic, the White House said, there were over 2 million eviction filings, with about 900,000 evictions taking place that disproportionately impacted Black women and children. According to the blueprint, the average rent increased by 17.2% between February 2021 and 2022, rising above $2,000 per month in May and far outpacing inflation. Prices have since decreased slightly, falling by 1.41% between November and December, just below the $2,000 threshold. The announcement came on the same day President Biden tweeted that people are starting to “breathe just a little bit easier” because fewer families are facing eviction than before the pandemic.

Rent has been growing increasingly unaffordable for decades. Between 2001 and 2015, the proportion of renter households that were rent-burdened — meaning they were spending 30% or more of their pretax income on rent — doubled from 19% to 38%, according to the Pew Charitable Trusts. In the announcement, the White House called out landlords for taking advantage of market conditions to “pursue egregious rent increases.”

Here’s how the White House plans to combat that:

Tenant protection is a major priority

The Federal Trade Commission and the Consumer Financial Protection Bureau announced that they will gather information to take a look at practices that unfairly block potential renters from accessing or staying in housing and protect them from discrimination.

The agencies also plan to collect a broad range of data that look at such practices as the creation of tenant background checks and how they are used, and how landlords use a renter’s source of income to make housing decisions. The move marks the first time that the FTC has issued a request so it can gather information to examine unfair practices in the rental market.

Additionally, the U.S. Department of Housing and Urban Development will propose that renters of public housing, and those who have project-based rental assistance who miss rent payments, will get a minimum 30-day buffer period before landlords can terminate their lease.

In fiscal year 2023, HUD will also award $20 million to the Eviction Protection Grant Program. The funds will go to nonprofits and government entities to provide legal aid to low-income renters “at risk of or subject to eviction.”

Access to affordable housing is set to expand

In 2023, the Federal Housing Finance Agency required that at least 50% of purchases of multifamily loans by Freddie Mac and Fannie Mae be “mission-driven” — opening the way to financing multifamily loans that guarantee affordable housing.

Last year, the two federal mortgage corporations purchased a combined $142 billion in multifamily loans, supporting over 1 million units. The White House is hoping for movement in that same direction for 2023, which would mean an investment in an estimated 700,000 affordable units.

In addition, the FHFA, Fannie Mae and Freddie Mac say they could potentially establish tenant protections that crack down on “egregious rent increases” at properties backed by certain federal mortgages.

The White House is launching a 'Housing Challenge' this spring

It’s called the Resident-Centered Housing Challenge, to be exact. As a part of the challenge, the Biden administration is calling on housing providers and other partners to commit to improving the quality of life for renters and to strengthen and enhance policies that promote fairness and transparency for renters. There have been at least six commitments from states, organizations and companies like the National Multifamily Housing Council, Realtor.com Rentals and the Pennsylvania Housing Finance Agency, which now have a reach of over 15 million rental units.

For example, members of the Stewards of Affordable Housing for the Future, a collaborative of 12 nonprofits that own or manage about 145,000 housing units across the country, have committed to offering flexible payment plans for residents with unpaid rent who have gone through the proper protocol with property management, and to providing certain notices and protections for tenants.

The White House left the door open for even more commitments from interested parties to create new benefits for renters that “enhance their economic mobility, build credit, and prepare them for homeownership.” The administration also called for more stakeholders to improve the quality of communication on tenant rights, eliminate hidden fees, charges and add-ons, and open up pathways to eviction mitigation and prevention.

Biden’s plan, however, is not aggressive enough for some progressive lawmakers, like Rep. Jamaal Bowman, D-N.Y., and Sen. Elizabeth Warren, D-Mass., who, along with 50 other members of Congress, wrote a letter to the president on Jan. 9 urging the administration to crack down on price gouging.

“Reports of corporate landlords and real estate companies increasing the rent for their own profit are rampant, placing additional strain on already struggling working families. In a country where increases in rental costs have far outpaced wage growth, it is clear that these heightened costs and acts of corporate profiteering are exacerbating an already existing crisis of housing unaffordability and instability,” Bowman responded to Yahoo Finance’s Jennifer Schonberg regarding Wednesday’s rollout.

“We believe that the administration can go significantly further to help tenants struggling to pay rent as soon as next week," he said. "We need actions that will urgently address skyrocketing housing costs, keep people housed, and rein in corporate profiteering.”

On the other side, real estate industry representatives say any further regulation could discourage new housing production. “Rental housing policy is heavily regulated at the state and local level,” Kenny Parcell, president of the National Association of Realtors, told CNN. “Federally enacted policies can potentially drive housing providers out of the market, which will have an immediate and long-term impact of making rental housing even more competitive and, therefore, more expensive for renters.”