Joe Biden Could Singlehandedly Lower Rents for the Millions Crushed by Them

Rents are too high. Joe Biden should issue an executive order to lower them.

Residential apartment buildings are seen on July 26, 2022 in New York City. (Spencer Platt / Getty Images)

The United States’ housing and inflation crises are deeply connected — and Joe Biden isn’t doing much about them.

“As of now, the Biden administration is dangerously silent on the single biggest line item in Americans’ budgets: their rent,” says Tara Raghuveer, a Kansas City–based tenant advocate and director of the People’s Action Homes Guarantee campaign. Her group brought one hundred tenants to both the White House and Congress last month, calling for an executive order that would slow the skyrocketing increases in the cost of rent.

Tenant, housing, and legal advocacy groups have even drafted the order for Biden to sign. It calls for rent control in all properties backed by federally guaranteed mortgages and in all cities and states that apply for federal block grant funding, along with investigations and prosecutions for rent price gouging as an unfair and deceptive practice prohibited by federal law. Together, these provisions would impact tens of millions of US renter households.

Fast and dramatic action is called for, as rents have risen to historic levels. Rents went up nationally 14 percent in 2021 and over 20 percent in several cities. Continued increases this year pulled the average US rent above $2,000 per month for the first time. Even before these hikes, the vast majority of renter households with extremely low incomes were paying over 50 percent of their income for rent. One in six tenants report being behind on their rent and evictions are rising along with rent prices.

Meanwhile, corporate landlords are tightening their grip on the nation’s rental market. Institutional owners — corporations or limited liability companies — now own the majority of all US rental units and over 80 percent of properties with twenty-five or more units. They are well aware of what that market control lets them get away with.

Bob Nicolls, CEO of one of America’s top corporate landlords, Monarch Investment and Management Group, told investors in September 2021 that big rent hikes were coming. “We have an unprecedented opportunity . . . to really press rents,” Nicolls said. “Where are people going to go? They can’t go anywhere.”

Sure enough, the top-ten publicly traded corporate landlords, many of whom share access to anticompetitive algorithms to keep rents artificially high, collectively saw their profits rise by 57 percent last year.

With housing costs being far and away the largest expense for US households, rent spikes are a key driver of inflation, which midterm voters cited as their top concern. But the Biden administration has done virtually nothing to control the cost of rent. The American Rescue Plan and the Infrastructure Investment and Jobs Act did not lower housing costs, and the Inflation Reduction Act stripped out the housing investments in the doomed Build Back Better legislation. Biden’s proposal to increase housing supply is a worthy long-term goal, but does nothing to relieve the emergencies being experienced by millions of households every month when the rent comes due.

An executive order would fill that gap. The order proposed by People’s Action and collaborating organizations would include:

  • The Federal Housing Finance Agency mandating that tenants in all properties financed by government-backed mortgages be protected by rent increase regulations that cap annual increases at 1.5 times the Consumer Price Index or 3 percent, whichever is lower. This would apply to over 12 million rental units, nearly 30 percent of US rental stock.
  • The Department of Housing and Urban Development requiring that states and cities applying for coveted Community Development Block Grants institute similar rent control.
  • The Federal Trade Commission adding excessive rent increases to its list of unfair and deceptive practices that could lead to enforcement actions.
  • The US Department of the Treasury clarifying that good cause is required for eviction and nonrenewal of leases in properties funded by the Low-Income Housing Tax Credit program.

Aggressive federal action would reflect the changed landscape for tenants who once dealt with mom-and-pop local landlords, now forced to confront the power of national and even multinational corporations.

“Increasingly the real estate market is run by institutional investors who have consolidated the market,” Raghuveer says. “These are multistate or even multinational actors that can’t be effectively regulated by local or state policy alone. “

These corporate landlords turn to the federal government to prop up their operations. “The business model of many of these real estate investors is to get government-backed mortgages through Fannie Mae or Freddie Mac, or a tax credit from the Treasury Department or support from HUD [Department of Housing and Urban Development] or the Department of Agriculture,” Raghuveer says. “So we see it as an absolute necessity that the federal government actually use those public subsidies and financing as leverage to increase the power position of the tenant relative to the landlord.”

The pressure on Biden to act is following the blueprint of successful recent campaigns pushing for executive action on student debt and drug policy. And the campaign has the support of national legal organizations and experts who argue that the president has the legal authority to take major steps to ease the housing crisis.

“Millions of tenants around the US live under the constant threat of eviction and displacement,” says Brandon Weiss, a housing law professor at American University Washington College of Law. “This draft executive order contains a number of common sense provisions that would provide them with some basic legal protections.

“While landlord tenant law has traditionally been addressed under state and local law, there is significant authority and precedent for the federal government to regulate this area as well,” Weiss says. “For example, as the draft executive order proposes, there is ample room for a more expansive approach to how the US Department of Housing and Urban Development interprets the duty to affirmatively further fair housing under the Fair Housing Act.”

Precedent for federal housing regulation includes the federal rent control imposed on 80 percent of US housing in World War II, recent pandemic protections for tenants in housing with government-backed mortgages, and a host of longtime anti-eviction and pricing requirements on federally subsidized housing. So it is well within Biden’s power to issue an executive order as an overdue response to the will of a worried public: August polling by Data for Progress showed a majority of US voters support Biden using his executive power to address the housing crisis, with a full 76 percent of Democrats calling for presidential action.

That level of public support comes as no surprise to Raghuveer or the coalition of more than 250 organizations calling for executive action. “The rent is just too damn high,” says Raghuveer. “It’s been that way for decades, but this is a new level of crisis now.”