In her first major campaign rally since becoming the Democratic presidential nominee, Vice President Kamala Harris made a relatively unexpected promise.
Harris addresses a crowd of 10,000 in Atlanta commitment “Taking on Corporate Landlords and Limiting Unfair Rent Increases.”
Harris’ comments echoed a recent proposal by the Biden administration just two weeks ago to cap fares Limiting rent hikes nationwide to 5 percent Over the next two years for all land owners owning more than 50 units. (They estimate it would cover more than 20 million units across the country.) The Biden plan — which would require congressional approval — would exempt yet-to-be-built units, so as not to discourage much-needed new housing. The two-year rent cap, Biden officials said, would serve as a way to reduce costs while building new housing.
Harris’ apparent embrace of the Biden plan is not the first time he has expressed support for rent control. In 2019, after Oregon adopted the first of its kind statewide rent control measures, he tweeted praise for the bill’s signing. “Nobody should have to choose between paying their rent or feeding their kids every month,” Harris wrote. As a senator, he introduced legislation to give tax relief to renters making less than $100,000 if they spend more than 30 percent of their income on rent and utilities.
Even then, it wasn’t clear if Harris would take a pro-rent stance on the presidential campaign trail — he’s already abandoned several other left-leaning positions as a candidate in 2020. In the last ten days, Harris Reject Medicare for AllDistance yourself from one Federal job guaranteeAnd he said And does not oppose fracking.
But when it comes to affordable housing, Harris has so far stuck closely to the political playbook of the president, who this year launched a campaign to more aggressively cut housing costs.
Over 22 million households Now more than a third of their income is spent on rent and mortgage rates increased from 2022 onwards.
Rent caps, however, have long been controversial among economists, most of whom argue that the policy hurts the housing market and ultimately limits supply, thus driving up costs. A re-evaluation More than 200 empirical rent control studies published in March found “widespread adverse effects” for communities with rent caps, and that landlords were more likely to allow rent-capped units to fall into disrepair.
Still, a growing movement of housing activists is pushing federal lawmakers to adopt the policy, citing the imminent threat of displacement for many tenants. More than 650,000 people in America experience homelessness on any given night, and federal data Released in late 2023 Most states have shown an increase in homelessness.
From a campaign perspective, the rent cap poll is pretty good. inside A May survey published by Navigator, Pollsters, a Democratic-aligned research group, found that a majority of voters support a crackdown on renting by corporate landlords and a crackdown on misleading rental fees. Building more homes as a means of increasing affordability was much less popular with voters, in contrast, than providing financial assistance to renters and controlling rents.
The rent cap pledge didn’t come out of nowhere
Biden’s announcement in mid-July to adopt rent caps for “corporate landlords” came amid political pressure, and a sense that he must do more to court voters who feel bad about the economy and their dire housing costs.
A Redfin-commissioned survey from February About two-thirds were found Homeowners and renters say housing affordability makes them feel negative about the economy. other The survey suggested Many of the young and black voters who helped Biden win in 2020 are now swinging their support for him, and those voters are more likely to be mercenaries.
Activist pressure came mainly from the Tenants Union Federation, a national group that seeks to unite tenants to advocate for higher standards. This group, formerly known as Home Guarantee CampaignBiden successfully pushed the administration to release a non-binding “blueprint.” Bill of Rights to Rent in January 2023, and since control rent turned his vision. Activists were particularly interested in rent control that Biden could legislate without going through Congress and Federal Housing Finance Agencywhich regulates the companies that issue billions in government-backed mortgages each year
In January 2023, these workers helped Push a congressional letter, led by Democrats, asked Biden to fight corporate landlords and stop “price gouging in the real estate sector.” The leaders proposed a suite of executive actions the government could take, including their top recommendation to direct the Federal Housing Finance Agency to establish new tenant protections, including rent caps.
By July 2023, A new letter from Democratic senators Directly requested the Federal Housing Finance Authority to enforce “limits against excessive rent increases” on properties with government-backed mortgages.
While most economists have long warned of the negative effects of rent control, rent activists and their progressive allies in academia and law Acting to challenge the notion that rent control inevitably hurts the housing market. They point to the debate around the minimum wage, where economists have argued for decades that raising wages would hurt workers and the economy, but recently researchers determined that such increases may actually be effective in raising the living standards of low-wage workers with little or no effect on job losses.
Advocates argue that empirical research is similarly challenging the conventional wisdom that rent controls limit the overall supply of new construction or housing, and they point to examples new jersey, Massachusetts, MinneapolisAnd California to make their case.
inside a letter In a Tenant Union Federation filing last fall with the Federal Housing Finance Agency, staff noted that 182 cities and municipalities across the country had some form of rent control as of 2018, and that California, like Oregon, had passed new statewide rent limits in the past five. year
Despite successfully pushing federal lawmakers to adopt potential new tenant protections and even rent controls, Biden and, so far, Harris have refused to go as far as the Tenant Union Federation wants. Some activists, for example, oppose the idea that rent caps would be temporary and that new units would be exempt. The president also refused to support a plan that relied solely on his own executive powers.
“That’s the whole truth [Biden] went to Congress to deal with it,” said Elizabeth Olvera Perez, a tenant and leader of the Louisville Tenants Union. Recently told the nation.
Tara Raghuveer, director of the National Tenant Union Federation, praised Harris’ announcement in Atlanta. Admit that It was not a given that it would be a priority for the vice president. “The rent cap is a winning issue,” Raghubir tweeted. “Candidates should pay attention to the top and bottom ballots.”
Most economists are against rent control
Skeptics of the rent cap point to St. Paul, Minnesota, as a cautionary tale
In November 2021, St. Paul voters Approve a ballot measure Capping annual rents for most apartments in the city at 3 percent beginning in May 2022. Free new developments for 20 years.)
Developers and Investors The alarm went offAnd a year after the experiment, the federal housing department reported that new building permits in St. Paul were down nearly 50 percent from a year earlier, while those in nearby Minneapolis were up 16 percent.
St. Paul Planning Officials They said they did not jump to any conclusions on whether rent control is to blame for declining construction, and their own permit numbers are slightly higher (Mercenary activists also argue that it is too early to legitimately assess the policy’s impact.)
Still, opponents and conservative intellectuals say St. Paul is confirming their worst fears that rent control will make housing more expensive overall, even if it relieves some existing renters in the short term.
Conservatives point to Biden and Harris’ new embrace of rent control as further evidence of the administration against the landlords. Writing in City Journal, Judge Glock, a senior fellow at the Manhattan Institute, argued that he doubts the Biden administration’s proposal would actually be limited to just two years. “Almost all rent control laws make such promises; Governments often cannot help themselves and extend the reach of laws anyway,” he points out The New York City Experience.
Even some prominent liberals have come out against the Biden administration’s new embrace of rent caps.
Jason Furman, the Obama administration’s top economic adviser, recently said, “Rent control is as disreputable as any economic policy in the tool kit.” told the Washington Post. “The idea that we’re going to revive and expand it will ultimately make our housing supply problems worse, not better.”
Jared Polis, the Democratic governor of Colorado, Criticism echoessaid Biden’s plan would “lead to the construction of less affordable housing and significantly increase the cost of housing.”
Legislative tea leaves suggest Congress could move forward with a federal housing package next year. If Democrats sweep November, and Harris continues to champion rent control, a national rent-cap policy looks much more likely. Whether this takes the form of a broader restriction on corporate landlords, or is aimed more at properties with government-backed mortgages, is less clear. However, if Republicans retain control of at least the House or Senate, the chances of the rent cap passing through Congress are virtually non-existent.
Rent activists, meanwhile, will continue to press Biden and Harris to use the president’s executive authority to limit rent increases. At this point, it’s unclear whether Harris would take such a step if he wins the election, even though his boss has ruled it out. The Harris campaign did not return a request for comment.
