Are rents too high? Among tenants, the consensus seems to be a resounding yes. According to an index compiled by housing marketplace Zillow, rents for certain types of properties have risen by 32% over the last four years. Additionally, six of the nation’s largest publicly traded apartment companies are under pending litigation due to the alleged use of proprietary algorithms to raise rents on tenants. Does this spike inspire cause for action? According to President Biden, it does.
On July 16, Mr. Biden announced a proposal that calls on Congress to pass legislation giving landlords a harsh choice: cap rent increases at 5% or risk losing federal tax breaks.
The current plan states that beginning this year and through 2026, corporate landlords with over 50 units in their portfolio would only be able to take advantage of the accelerated depreciation available to owners of rental housing if they keep annual rent increases to no more than 5% each year, a move that could affect more than 20 million units across the country.
These recent updates are by no means close to law, but Schnieder Downs’ real estate industry group is keeping a close watch. As the proposal continues to evolve, we can assist, ensuring up-to-date information and constant communication on legislation updates.
For more information on the proposal and additional detail surrounding the Biden-Harris Housing Plan, see FACT SHEET: President Biden Announces Major New Actions to Lower Housing Costs by Limiting Rent Increases and Building More Homes | The White House.
About Schneider Downs Real Estate Services
The Schneider Downs Real Estate industry group provides accounting, tax and consulting services to clients nationally and internationally. Our real estate group meets our clients’ needs by providing value-added solutions in all areas of real estate ownership, including commercial, industrial, residential, multi-family, student housing, hotel and land development.
To learn more, visit our Real Estate Industry Group page.
