Summary of The White House’s New Actions for Affordable Housing

In July, President Biden announced new actions to lower housing costs and provide more affordable housing for renters, which include:

• Calling on Congress to pass legislation for corporate landlords to cap rent increases on existing units at 5% or risk losing current federal tax breaks.
• Repurposing public land to provide as many as 15,000 additional affordable housing units in the state of Nevada.
• Rehabilitating distressed housing, building more affordable housing, and revitalizing neighborhoods.

New Actions for Additional Affordable Housing

The following is a summary of what each action means for property managers and residents.

Pass Legislation to Cap Rent Increases at 5%

If passed by Congress, beginning this year and for the next two years, corporate landlords would only be able to take advantage of faster-depreciation write-offs available to rental housing owners if they keep annual rent increases to no more than 5% each year. This statute would apply to property owners with more than 50 rental units in their portfolio. However, there would be an exception made for owners investing in new construction and substantial renovation/rehabilitation.

Repurpose Public Land to Create Affordable Housing

The Biden-Harris Administration plans to repurpose federal land to build thousands of affordable homes. The administration is calling on federal agencies to assess surplus land and repurpose it to build additional affordable housing. State and local governments and other public entities also own underutilized land that has the potential to become affordable housing.

• The Bureau of Land Management (BLM) will create thousands of affordable housing units on bureau land in Nevada by selling public land for below market value. BLM is also considering public land identified by local governments in Southern Nevada.
• The United States Forest Service (USFS) will lease Forest Service land to build workforce housing developments in Colorado and Idaho. Further, USFS is exploring additional federal land for workforce housing across the country.
• The United States Postal Service (USPS) will repurpose certain facilities not needed for postal operations to use for affordable housing.
• The U.S. Departments of Housing and Urban Development (HUD) and Health and Human Services (HHS), as well as the U.S. General Services Administration (GSA) plan to make it easier for public and nonprofit developers to use federal buildings and land to create housing for people experiencing homelessness.
• The U.S. Department of Transportation (DOT) plans to allow transit agencies to use their property to support the development of affordable housing.

Rehabilitate and Build Affordable Housing

HUD awarded $325 million in Choice Neighborhoods Implementation Grant funding to build more than 6,500 units of affordable housing to support small businesses and build childcare centers and new parks. Choice Neighborhoods is HUD’s signature program and grants were awarded to cities in Tennessee, Texas, Alabama, Florida, Nevada, New York, and New Jersey.

NAA’s Response to Biden’s Proposed Rent Cap

The National Apartment Association (NAA) serves as a leading voice and prominent resource for the rental housing industry through advocacy, education, and collaboration. In response to President Biden’s announcement of the 5% corporate rent cap, the NAA issued a press release in July. In the release, the association states that “Rent caps, more commonly known as rent control, are failed policies that don’t work—research has shown it, the lack of affordability in rent-controlled jurisdictions reinforces it, and statements from countless economists across generations and the political spectrum are crystal clear.”

Conclusion

The creation of affordable housing solutions is now—and will likely continue to be—a polarizing topic. As actions to lower housing costs and increase housing inventory progress, we will continue to keep you informed.

What’s not up for debate is the need for rental housing providers to streamline their operations to boost productivity and profitability. Software solutions like Rent Manager can support and simplify your affordable housing management processes—from attaching HUD and HAP contracts and documents to unit accounts to tracking and managing rent schedules and more. Take a tour of the program today to find out how.