PolicyLink’s Post

President Biden is urging Congress to implement a national rent control measure that would cap rent increases at 5% per year for approximately 20 million rental units. This policy targets landlords with over 50 units, who would lose federal tax breaks if they exceed the cap. Biden also announced plans to repurpose federal lands for affordable housing. The Bureau of Land Management will consider selling 20 acres in Nevada at below-market rates to create affordable housing, and the US Postal Service plans to repurpose unused properties for housing. Additionally, $325M in grants will be distributed to seven cities to revitalize neighborhoods. Biden's proposal faces steep odds in Congress, especially with the upcoming November elections and a GOP-controlled House. Nevertheless, the proposal aims to address voter concerns over high housing costs, a significant component of inflation. Keep reading 🔗 https://lnkd.in/eQtvCT5X #rents #policy #biden #multifamily #housingcrisis

Great coverage by CRE Daily. Rent control does not work, plain and simple. It surprises me that this idea is even entertained at this point in the cycle, given that the majority of real estate operators are already facing numerous challenges. While the concept of capping rent may sound appealing to those unfamiliar with the industry, it's just not that simple. Investors often avoid rent-controlled properties, and why is that? 1️⃣ Rent control limits the potential returns on investment. ▪ Don't get me wrong, the upfront modeling of an opportunity should never exceed ~3%. ▪ But, for obvious reasons, investors want to exceed expectations. This is the reality of capitalism. 2️⃣ Rent control can severely impact property owners in worst-case scenarios, leading to substantial losses or even foreclosure. Let’s consider a hypothetical scenario... ▪ Imagine a 200-unit property that is fully occupied generating ~$3.12m in NOI (Net Operating Income), valuing it at ~$57m with a 5.5% cap rate. ▪ A crisis occurs, reducing occupancy to 50%. ▪ The annual debt service is ~$2.12m and while the property was generating solid cash flow at full occupancy, the owner can no longer cover the debt payments at 50% occupancy. ▪ To avoid losing the property, the owner significantly lowers rents on the vacant 100 units to get back to full occupancy as fast as possible. ▪ The property becomes cash flow positive again with an NOI of ~$2.52m, valuing it at ~$46m with the same 5.5% cap rate. ▪ This results in a ~$11m decrease in value (almost 20%) and, due to rent control, it will take several years for the property to return to its original rent levels. ▪ Now there's a high likelihood the property may deteriorate over time with minimal maintenance or improvements, as the owner has little incentive to invest further in a property with restricted income potential. ❗In my opinion, if the government aims to curtail rent increases, the most effective approach is to heavily subsidize new development. New construction has plummeted in recent years due to high building and financing costs. The fundamental issue has always been, and will continue to be, supply. What are your thoughts on rent control? #CRE #economics #development #investments #rentcontrol

Biden's proposal to cap national rent increases at 5% sparks crucial questions about housing policy and affordability. Will this address the issue, or could it lead to a housing shortage? Managing rising taxes and insurance costs adds complexity. Should incentives for contractors and small businesses have been prioritized to stimulate housing supply and job creation? What do you think? #Biden #rental #multifamily #apartment #cap #rent #president

A calamity years in the making! Not only a financial disaster threatening to bankrupt formerly well-off councils. But a human tragedy forcing families for months and years into expensive and unsuitable temporary accommodations! It’s worth examining how we got to this point: for decades these housing needs have been mostly met by the private sector. At zero cost to the taxpayer. They even contributed significant tax revenue. Now many of the providers who formerly supplied these homes have been forced out by a sustained vendetta of tax hikes, expensive and intrusive regulations backed with toxic political rhetoric. Interest rates didn’t help, but were by no means the main cause. It beggars belief that, even now, the architects of this crisis are unable to admit any responsibility. Unbelievably, some still proclaim the answer is yet more landlord-bashing in the form of rent controls and state controls on tenancies. The failure to even acknowledge the problem suggests the solution to this issue is a long way off!

President Biden unveiled a new proposal to cap rent increases nationwide, aiming to tackle soaring housing costs, though it faces hurdles in Congress and skepticism from some experts concerned about exacerbating housing shortages. Despite challenges, the plan would limit annual rent hikes to 5% or landlords risk losing federal tax breaks, potentially impacting nearly half of the rental market, yet its impact on Bay Area renters, already subject to local rent controls, remains uncertain. https://lnkd.in/gAf5vigF #RentControl #HousingAffordability #RentalMarket #BayAreaHousing

A good response article to terrible policy in Ca. (The land of regressive property taxes.) When you hear pseudoeconomics being twisted to imply how large investors buying, remodeling and renting homes drives up prices, what they are really saying is that they don’t want renters in high income neighborhoods. Excluding people who can’t buy a home from living in upper class neighborhoods is classist, rascist and anti-American. We will not let those policy ideas progress. https://lnkd.in/geGc7KsW

Bloomberg News: The most sweeping change in New York housing policy in years is on the brink of passing the state legislature in a budget deal expected to exceed $233 billion, according to people familiar with the negotiations. The housing deal would amount to the most dramatic changes in state housing policy since the legislature passed a 2019 bill package expanding tenant protections in rent-regulated apartments. The deal is said to include the elimination of a state rule preventing New York City from building more densely. It also would allow landlords to raise rents in vacant apartments where landlords make at least $30,000 in improvements. State lawmakers could vote on budget bills as soon as this week, with an extender potentially passing Monday to keep government running before a final agreement gets signed into law. #421a

My question: in history has government price controlling ever led to more supply? I'd like to read some case studies and see what it led to. So Biden proposes 5% rent cap increase on 50+ unit apartments. With some stipulations. The price control seems to lower housing costs but does it solve the deep root of the problem with supply and demand? I think we should focus on incentivizing increased supply which will lower demand which will stabilize prices. I think some better proposals would be to encourage counties to ease up on zoning density restrictions. To give tax credits / write offs to those who create more housing supply. Like to hear others thoughts. https://lnkd.in/gEhjyq3M

🏠💼 Concerned about rising rent costs in Georgia? It's a hot topic, and there's more to it than meets the eye. Rent hikes are driven by increasing property taxes, homeowners insurance, and maintenance costs for both supplies and labor. These expenses are rising faster than many salaries, posing challenges for residents and businesses alike. It's crucial for policymakers, employers, and communities to collaborate on solutions that promote fair wages and affordable housing initiatives. #AffordableLivinf #GeorgiaRealEstate #RentalMarket #IncomeInequality #PropertyInvestments

Baltimore city has over 20k tax delinquent properties this year!!  Let’s help the city solve the affordable housing crisis by getting these discounted properties to be renovated. Comment "MORE INFO" if interested! #taxlienvesting #taxdeed #taxdeedinvesting #taxdeedinvestingforbeginners #realestateinvestors #realestateinvestments