Biden Talked Rent in the State of the Union—Now He Needs a Real Plan to Deal with the Rent Crisis

Private equity is the dominant form of financial backing for the 35 largest owners of multifamily properties. This flood of capital has led to big and small acquisitions, consolidating the market and manufacturing the conditions to maximize landlords’ profits. 

In Thursday night’s State of the Union address, President Joe Biden talked about the rent crisis facing working Americans. ​“We’re cracking down on big landlords who break antitrust laws by price fixing and driving up rents,” he said. 

This is a first. Biden’s focus on rent — and his administration’s focus on tenants — is a direct result of years of focused organizing, led by tenant unions across the country, organized through the Homes Guarantee campaign. Since September 2021, tenants have met with officials in the White House, the Federal Housing Finance Agency (FHFA), the Federal Trade Commission, the Consumer Financial Protection Bureau, the Department of Treasury, and the Department of Housing and Urban Development. 

Alongside Biden’s remarks, on Thursday the White House released a fact sheet on housing, calling on federal agencies to root out anti-competitive and deceptive practices, like algorithm rent-setting and ​“junk fees.” These are positive steps, but they are marginal to the issue of rent itself. 

Biden’s moves come after a ProPublica investigation revealed last year that RealPage, a corporation that sells software to the nation’s largest property managers, colluded to artificially increase rents by way of a price-setting algorithm. Many landlords have raised rents beyond the rate of inflation: that’s rent gouging. Starwood Capital Group manages more than $105 billion in assets and spent the pandemic buying up thousands of residential units and continued filing evictions, despite a national moratorium. Over the same period of time, Starwood hiked rent, raising costs by 52% at their property Wellington Green in Palm Beach County. In the Starwood Property Trust’s 2022 annual report, executives noted, ​“we recognized a $555 million increase in the fair value of these assets driven by rental growth.” The firm’s CEO even called inflation ​“an extraordinary gift that keeps on giving.”

To protect their market position and fend off regulation, the housing industry lobby has made itself a fixture in Washington. The National Association of Realtors regularly spends more than any other lobby group, dropping nearly $82 million in 2022 alone and more than $52 million in 2023, mostly to oppose regulation. 

The federal government is in business with our landlords. Fannie Mae and Freddie Mac, known as the government-sponsored enterprises (GSEs), provide $150 billion in annual financing, guaranteeing landlords’ loans on lucrative terms and relieving their lenders (many of the villains of the 2008 financial crisis) of default risk. The GSEs provide a major benefit to the industry — a benefit which comes with almost no strings attached. In fact, Fannie and Freddie have created incentives for the most predatory landlord behaviors, including the worst rent gougers like Starwood. They have a track record of providing guarantees to overvalued loans that could only be paid down if the landlord planned to raise rents and fees, neglect building maintenance and evict tenants. 

FHFA is the regulator and conservator of Fannie Mae and Freddie Mac. In this role, FHFA has the authority to put in place regulations that would shape the market for the better, at no cost to the American people. FHFA should immediately institute a 3% cap on annual rent increases in the more than 12 million units with government-backed loans.

Patchwork regulation won’t suffice to regulate businesses that exist across state lines, and many states preempt the most effective tenant protections measures, like rent control, based on laws passed by industry lobby groups in the 1990s. More to the point, it is the feds who are in business with our landlords, and the feds who have the leverage to change their business. 

For people like Mosley and the millions of other tenants struggling to stay in their homes, rent regulations can’t come soon enough, and Biden is in a position to make these changes a reality. The rent is too damn high, and it is high time for federal intervention to protect tenants.