Biden Admininistration Plans to Cap Rent Growth at 10% in LIHTC Units

New regulations set to be announced soon will enforce a cap of 10% on annual rent increases for properties financed by the Low-Income Housing Tax Credit (LIHTC) program.

Impact on LIHTC-Financed Properties

There are over 1 million homes in the U.S. funded by LIHTC, although the number facing double-digit rent hikes remains uncertain. Affordability requirements already in place make it challenging for rents to rise by 10% annually.

Focus on Tenant Advocacy

Tenant advocates applaud the move for its symbolic significance in linking federal funding to tenant protections. National Tenant Union Federation Director Tara Raghuveer highlights the need for such protections to extend to federal financing, the primary subsidy for multifamily housing.

Concerns from Housing Development Groups

Groups like the National Housing Conference and the Mortgage Bankers Association express concern that the cap could hinder efforts to develop subsidized affordable housing. They fear it could undermine the LIHTC program, potentially contradicting broader efforts to increase affordable housing.

Federal Momentum to Address Housing Affordability

There's federal momentum to address the housing affordability crisis, including a bill in Congress to bolster the LIHTC program and President Biden's emphasis on housing affordability in his recent State of the Union address.