'Rent Is Too Damn High': Biden Pressured to Act as Housing Costs Fuel Inflation

Newly released inflation data showing that rent has jumped 7.2% over the past year--the largest increase in four decades--is sparking fresh demands for President Joe Biden and Congress to take action to curb soaring housing costs, including by pursuing rent control measures and a host of other policy interventions.

"Without a real strategy to regulate rents, President Biden lacks a real strategy to fight inflation," Tara Raghuveer, director of the Homes Guarantee campaign at People's Action, said in a statement Thursday. "That problem will play out in the midterms. But Biden can fix it by doing everything in his power to regulate rents and stop landlords from profiteering off this inflation crisis."

"Over the longer term, policymakers must transform housing from a commodity to a guaranteed public good."

In an analysis unveiled after the Labor Department's Consumer Price Index (CPI) showed that inflation rose again last month--fueled to a significant degree by rent, which makes up about a third of the CPI--the Homes Guarantee campaign warned that rent increases are an even "bigger problem" than the new data suggests.

"The CPI's measure of rental inflation doesn't factor in rising prices in new rentals and leases, and therefore underestimates the rental inflation people face day to day," explains the analysis, which was co-authored by experts at the Groundwork Collaborative. "Some privately collected measures have reported that rents rose 7.5% year-over-year in September."

The brief also argues that far from combating rent inflation, the Federal Reserve's interest rate hikes are actually making it worse by driving mortgage rates to a 20-year high, which has had the effect of "pushing would-be homebuyers into the rental market" and "putting even more upward pressure on rent prices."

"The Federal Reserve seems intent on making housing increasingly unaffordable, forcing prospective homebuyers into the rental market, and making people even less able to pay their rent by putting millions out of work," the analysis warns.

In addition to calling on the Fed to stop raising interest rates before it induces a devastating recession, People's Action and Groundwork demanded that Congress and the White House do everything in their power to reverse the trend of skyrocketing rents--part of a broader nationwide housing crisis made worse by the coronavirus pandemic.

"The president has the authority to take executive action and direct agency-level action to regulate rent," the groups note. "For example, the president can direct the Federal Housing Finance Agency (FHFA) to impose rent controls on borrowers of federally-backed mortgages, which would apply to approximately 43.8 million rental units--immediately slowing down rental inflation."

"Over the longer term," they add, "policymakers must transform housing from a commodity to a guaranteed public good--making large-scale investments in the supply of housing that is off of the private market, with a goal of guaranteeing safe, accessible, truly and permanently affordable homes: a Homes Guarantee."

Tenant advocates have voiced dismay in recent months at the lack of serious attention that Democratic lawmakers and the Biden administration have devoted to rental inflation, even as both have vowed to bring down surging prices.

"If federal policymakers aren't working around the clock to figure out how to regulate rent, by any means necessary, what exactly are they doing about the economy?" Raghuveer asked in a Twitter post on Thursday. "What are they doing to fight for the people?"

"It is no longer a question of if or how Biden can act on his own to protect tenants, but rather if he has the political will to do so."

In his statement on Thursday's CPI data, Biden touted the Inflation Reduction Act--a law that doesn't include any affordable housing provisions--while not mentioning rental inflation or housing at all.

While the Biden administration garnered qualified applause from advocates for its Housing Supply Action Plan--which carries the stated goal of closing the housing supply shortfall within five years--campaigners say nothing the White House or Congress have done in recent years has been anywhere near sufficient to curb the nationwide rental crisis.

"None of President Biden's major legislative accomplishments--the American Rescue Plan, the Infrastructure Investment and Jobs Act, or the Inflation Reduction Act (IRA)--contained provisions to reduce housing costs or expand housing supply," the Revolving Door Project's Andrea Beaty and Vishal Shankar noted in a Wednesday blog post. "The Build Back Better Act--which did contain transformative investments in housing supply and affordability vouchers--was killed by Joe Manchin last December and its housing provisions were abandoned for the scaled-down IRA."

"The president and his top housing officials have broad legal authority to hold corporate landlords accountable by conditioning existing federal subsidies and mortgages to robust tenant protections--all without the need for congressional intervention," Beaty and Shankar added. "The Homes Guarantee campaign continues to do the leg work of determining how the Biden administration can help tenants across the country, immediately and under existing authorities."

On its website, the Homes Guarantee campaign outlines a number of executive and agency actions that the Biden administration can take to tackle rental inflation and bolster tenants' rights.

For example, the campaign argues Biden can condition all federal financing and rental subsidies on robust tenant protections, including:

• Rent Control: Limit rent increases to 1.5 times the Consumer Price Index or 3%, whichever is lower.
• National Right to Lease Renewal: Prohibit evictions without good cause, ensuring every tenant has the right to a lease renewal. Good cause is defined as serious and repeated lease violations provable in a court of law.
• Tenant Opportunity to Purchase: If a landlord should choose to sell a property, tenants have the right to purchase the property before it is available to the public market.
• Tenant Right to Organize: Tenants have the right to form tenants' unions free from fear of retaliation from the landlord or managing agent. Ownership and management representatives must not interfere with the creation or actions of tenant organizations.

"It is no longer a question of if or how Biden can act on his own to protect tenants, but rather if he has the political will to do so," wrote Beaty and Shankar. "Historic rent hikes have only strengthened tenant organizers' desire to guarantee safe, accessible, sustainable, and affordable homes for everyone. The question remains: will the White House have their back?"