Biden Housing Plan 2024: Full Investor and Landlord Overview

Everyone involved in the rental industry needs to know about the Biden Housing Plan. The Biden Housing Plan has been a hot topic in rent regulation news because it could drastically limit landlords’ and investors’ profit potential. Let’s break down this plan, its implications, and how to deal with those implications if it becomes law.

Main Takeaways

• The Biden Housing Plan would allow landlords to limit rent increases to 5%. Otherwise, landlords lose eligibility for accelerated property tax depreciation.
• This could affect the real estate industry by deterring developers, landlords, and investors from getting involved in new properties. Also, it could prevent landlords from having the funds to adequately maintain and improve their current units.
• Landlords and investors can prepare for any changes ahead by diversifying their rental income stream. This could come in the form of vacation rentals, making rental-related services available to the public, etc.

Table of Contents

• What is the Biden Housing Plan?
• How This Would Affect Landlords and Real Estate Investors
• How the Housing Industry Has Reacted 
• Will Congress Pass the Biden Housing Plan?
• What Landlords and Investors Can Do If the Plan Passes

What is the Biden Housing Plan?

Our Northern Virginia property management company is here to report that in late July, the 2024 Biden Housing Plan passed the House of Representatives. The Biden Housing Plan would require landlords to cap rent increases to a maximum of 5%. Furthermore, it stipulates that landlords who do not comply will not be eligible for accelerated depreciation write-offs.

If passed, the Biden Housing Plan would take effect this year and last until 2026. The rent increase limit would apply to landlords who have over 50 units in their portfolio. However, it would not apply to buildings being constructed or markedly redone.

How This Would Affect Landlords and Real Estate Investors

As stated above, if the Biden Housing Plan becomes law, landlords who do not cap their rental rate will not be eligible for accelerated depreciation write-offs.

Property depreciation is one of the biggest tax benefits rental professionals enjoy. It allows owners to earn tax deductions as their property continually ages and loses value. With accelerated depreciation, rental owners can gain these tax benefits faster than usual, even when their property is newer. Landlords and investors would lose access to this if the plan passed.

How the Housing Industry Has Reacted 

Housing industry experts have expressed concern that the Biden Housing Plan would have industry-wide ripple effects. In essence, it would discourage construction companies from building new properties, investors from investing in them long-term, and in turn, landlords from expanding their rental business.

In addition, some landlords feel that the inability to make a sufficient rent increase restricts their property maintenance. They may struggle to cover expenses or improve their rentals.

This would impact landlords’ ability to provide a quality rental experience, which affects their brand reputation and retention rates. Moreover, since the properties would be in worse shape, their market value would drop. That leads to an economic spiral downward for landlords and investors, all the way from top to bottom.

Furthermore, insiders such as Sharon Wilson Géno, president of the National Multifamily Housing Council, have hinted at further implications. She observed that state and local governments may adopt the rent increase caps, regardless of whether the federal government passes it.

In addition, groups such as the National Association of REALTORS® have pointed out that the Biden Housing Plan could actually backfire on its intention to protect renters.

After all, if developers stop building in rent-controlled areas, the number of reasonably priced housing units available to renters in need will decrease. Instead, they may concentrate their efforts on unregulated areas. These could have higher rental rates, to begin with, or have more room for a lofty rent increase.

In other words, developers could foster a lopsided rental supply—one more robustly sized than before, but one that only people with high incomes can afford.

Will Congress Pass the Biden Housing Plan?

The consensus is a resounding no. Major news sources, such as the New York Times, CNN, and Axios, all agree that Congress would be hesitant to pass the Biden Housing Plan at this point, right before an election.

What Landlords and Investors Can Do If the Plan Passes

If the Biden Housing Plan ever passes, landlords and investors need to find other avenues to protect their cash flow. Put another way, they must diversify their rental income streams.

Adding Cheap, Value-Boosting Services to Your Rentals

Improving your property doesn’t have to be a huge investment. Relatively small, but hot-demand amenities can boost your rental income, such as:

• Laundry services
• Expanded parking
• More storage space

On the other hand, if you really want to splurge, you may even want to consider adding a pool or other luxuries.

Even better, offering extra services can exponentially raise your property value.

Opening Those Services to the Public

It’s one thing for a fixed set of tenants to give you, say, laundry service income. Imagine how much that income could multiply if you allowed the public to access it. Due to this, it’s just good business sense to open your services to the public.

Another way to monetize your property is by opening spaces for event use. You could provide spaces to be reserved as workspaces, company retreat rooms, event spaces, or other activity centers.

Try Being a Section 8 Landlord or Investor

Section 8 provides guaranteed, government-subsidized rent. What’s more, it’s extremely in demand. Most towns have waiting lists that go on virtually endlessly. As such, Section 8 housing can help you secure rental income.

For investors, section 8 properties are very stable investments because they’re always in high demand. They will always have value and potential renters. So, you might want to consider pursuing this.

Vacation Rentals

With vacation rentals, renters are often more willing to pay larger sums for their stay. After all, this is their time to relax and rewind. Deluxe destinations are the way to do that.

Even better, this can attract high-income tourists from all areas and walks of life, whether they’ve just retired, graduated, or simply want some me-time for a getaway. The possibilities are endless!

Diversify Your Rental Income with BMG

The Biden Housing Plan is a hot topic in rent regulation news because it could upend landlord and investor sources of rental income. A possible rent increase cap presents many problems, such as decreased property value, tenant experience problems, and hesitance to invest in rent-capped locations.

Luckily, investors and landlords have ways to help offset these potential changes. They can prepare by diversifying their income streams. This could happen by adding modest upgrades, like more storage space, to increase the number of renters to your property. Or, you could open your property units to the public as service centers, meeting spaces, or vacation rentals.

To really secure a rent increase cap-proof business, you can use the expertise of a professional property management team.

Property management professionals can run a fine comb through your expenses to help you upgrade—or cut corners—without compromising quality. They can coordinate your property maintenance needs and tenant issues.

More specifically, property managers like us can handle your marketing efforts, so you don’t have to. We can feature you in our specialized rental listing database for tenants. As a bonus, we have connections throughout the real estate industry. So, we can score exclusive deals on property services you otherwise can’t access.

Contact us today to unlock the tools you need for resiliently profitable properties.