The Biden-Harris administration recently proposed capping rent price increases at 5%. The cap would apply to any landlord that owns more than 50 units, which equates to 20 million rental units nationwide, or roughly 50% of the nation’s total units. I suspect that all Americans agree with the goal of keeping essentials like food, housing, and healthcare affordable. Unfortunately, the proposed price controls – rooted in bad economic assumptions and perhaps some technophobia – are likely to do the opposite.
A third of American households rent, roughly half of which devote over 30% of their income to this monthly bill. These renters are frustrated. Rent inflation is 80% higher under Biden-Harris than in the Trump years. And it’s worse in the swing states, where rents have more than doubled over the past four years.
The administration seems to believe its rent cap will counterbalance what it describes as excessive landlord profits, which it contends have come in part from their increasing use of algorithms i.e., computer programs that suggest rental prices based on supply and demand estimates.The excess profit accusation is simply wrong. In an attempt to corroborate its claim, the White House cited Mid-America Apartment Communities and AvalonBay Communities for their respective 6% and 18% increases in profits during the first quarter of 2024. However, the White House conveniently ignored these companies’ respective 15.5% and 18.3% profit declines in 2023.
The administration’s stoking fears about algorithmic pricing, including through initiating Department of Justice and Federal Trade Commission investigations, is also misplaced. […]
– Read More: www.dailywire.com
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