The Biden administration is set to announced a 10 percent cap on how much rent can go up in some affordable housing units according to a new report.
The move comes as rising rent is one of the largest contributors to ongoing inflation as affordable housing remains a long-standing challenge in the United States.
According to the Washington Post, the move would limit the amount property owners can raise rents yearly if they are part of a tax credit program for low-income housing.
The new regulations are expected to be announced on Monday and economists estimate the cap could apply to more than a million homes the report said.
The Washington Post reports the Biden administration will announce a cap on rent increases fr affordable housing units at 10 percent on Monday (FILE photo)
To receive the Low-Income Housing Tax Credit, developers must already follow a series of affordability rules including at least 20 percent of project units being occupied by tenants with an income at 50 percent or less of the area median income.
It also requires 40 percent of units being occupied by tenants with incomes averaging no more than 60 percent of the area median income.
The move comes just weeks after President Biden proposed a range of new housing initiatives during his State of the Union address largely in the form of tax credits.
During the speech, the president also called on congress to pass a plan to build and renovate two million affordable homes and bring rent down.
During his State of the Union address on March 7, President Biden called for more affordable housing units to be built to help bring down rents. He also touted cutting ‘red tape’ so builders can get financing to help build 1.7 million housing units
The United States have been facing a longstanding affordable housing crisis.
No state across the country has an adequate supply of rental housing for low-income renters, a report from theNational Low Income Housing Coalition found.
In total, the U.S. is facing a 7.3 million rental housing shortage for renters with extremely low incomes.
The Biden administration also recently released an economic report that documented how nearly a quarter of all tenants now spend more than half their income on rent and more than 30 percent of tenants spend more than 40 percent of their incomes on rent.
The reported cap on affordable housing unit rent increases would be the latest in a series of steps the Biden administration has taken in an effort to help addressing housing through boosting both the supply of affordable housing as well as promoting transparent rental markets.
Some steps have included expanding financing for affordable housing unites, as well as work to address zoning reforms.
In 2022, the administration released a Housing Supply Action Plan to help ease housing costs over time. It called for closing the housing supply gap in five years.