Background Press Call by Representative Steven Horsford, National Economic Advisor Lael Brainard, Domestic Policy Advisor Neera Tanden, and Senior Administration Officials on New Actions to Make Renting More Affordable for Millions of Americans

Via Teleconference

5:26 P.M. EDT

MR. EDWARDS: Hi. Thank you for joining us this afternoon. My name is Jeremy Edwards. I'm with the White House Press Office.

In a moment, you're going to be hearing from several speakers about new actions we will be announcing tomorrow to make rents more affordable for millions of Americans that the president will announce.

Today, you're going to be hearing from National Economic Adviser Lael Brainard, Domestic Policy Adviser Neera Tanden, and Congressional Black Caucus Chairman Steven Horsford from Nevada. After those opening remarks, we're going to switch to a Q&A that will be on background and that -- attribution for that portion will be to a "senior administration official" who will be participating in the Q&A.

With that being said, we are going to jump in. But before so, I just wanted to make sure that folks are reminded that this call and its contents and the background materials you receive will be embargoed until tomorrow at 5:00 a.m. That's tomorrow 5:00 a.m. is when the embargo lifts.

All right, and with that, I'll kick it over to National Economic Adviser Lael Brainard.

MS. BRAINARD: Thank you. And thanks to everyone for joining us.

President Biden knows that high rents are making it hard for young people to set out on their own and for families to live near good jobs and good schools. One third of Americans are renters, and the share of renters is even higher for young people and for lower-income households.

In places like Las Vegas, institutional investors are buying up homes with cash, turning them into rentals and raising rents. Some corporate landlords are raising rents by more than their costs, expanding their profits at a time when millions of Americans are struggling to cover rent each month.

To address the high cost of rent, the president believes that corporate landlords should either cap their rent increases to no more than 5 percent or lose their special tax breaks. This would apply to landlords with over 50 units in their portfolio, who account for roughly half of the rental market.

Under this policy, only corporate landlords that keep annual rent increases to no more than 5 percent for the next two years would be able to take the faster depreciation write-offs that all owners of rental housing currently benefit from.

This policy wouldn't affect new construction and units that have recently undergone substantial rehabilitation so as not to discourage new supply.

The proposal to condition corporate landlords' tax breaks on capping rent increases builds on actions the administration is taking to make rents more affordable. The administration is capping rent increases on the rental units financed with federal tax credits, cracking down on price-fixing by landlords that use special software to raise rents, and banning misleading and hidden rental junk fees like move-in fees.

And the president's budgets and American Rescue Plan have contributed to the largest issuance of new Housing Choice Vouchers in decades.

The president previously announced a plan to address the high cost of homeownership through a mortgage relief tax credit for two years. The cap on rent increases would be in place for two years and serve as a bridge until more housing units are built and housing units currently under construction become available.

The president's housing agenda prioritizes building more new units to bring down the cost of housing over time. Already, state and local governments have invested nearly $20 billion from the American Rescue Plan's State and Local Fiscal Recovery Fund for housing. And those federal investments have contributed to the 1.7 million housing units under construction, which is a 50-year high.

In what experts have called "the most consequential" housing plan and more than 50 years," the president has called for the construction of 2 million new affordable units across the country.

The Senate could get started on the first 200,000 new units right away by passing the tax legislation that had strong bipartisan support in the House. But we can't afford to simply wait for Congress to act. The administration is using all available tools and taking a number of new steps to unlock more affordable units.

And I will pass to Director Tanden to discuss these new actions.

MS. TANDEN: Thanks so much, Lael. As noted, the Biden-Harris administration is focused -- seriously focused on bringing down rental and housing costs for good. And we know they have to rapidly boost supply of affordable housing to do that.

That's why the President likes to characterize his plan as "build, build, build." And we know that we're already making major progress across the country. More units are under construction during this administration than in the last 50 years. And the rate of new housing starts is up 17 percent compared to the previous administration.

But we do know we need to do a lot more. The cost of rent and housing is too high. That's why the president has put forward what experts call, and as Lael just said, "the most consequential" housing plan in a generation. And we're very focused on -- on the fact that it will build 2 million new affordable homes across the country.

Congress needs to pass the president's plan now. It has critically important proposals, and it's -- some that he's outlined in the 2025 budget, including the $20 billion Housing Innovation Fund, as well as additional low-income housing tax credits. Both of these combined can really drive additional housing, which we -- we know we need.

Today, we are announcing a new government-wide effort to repurpose federal land and other properties to build more affordable housing. This is a crucial component of our agenda. The federal government is the biggest landowner in the country, and some of its land is currently underutilized or entirely unused.

The president is asking federal agencies from the Department of the Interior to the Department of Defense to identify opportunities to repurpose surplus property to build more affordable housing. We know this is a critical national need and that is why it is this priority across agencies.

I do want to say agencies are already taking action. And I'm pleased to announce that today the Bureau of Land Management is announcing forthcoming sales under the Southern Nevada Public Lands Management Action Program, the biggest-ever sales under the program, which will create hundreds of affordable units for sale and for rent.

And BLM is now working with local governments in Southern Nevada on an additional 562 acres that have been identified as to appropriate for housing, which could support an additional 15,000 affordable units or more in Southern Nevada.

We are -- the federal government is the biggest landowner in the country, and some of its land is currently underutilized or entirely unused as I said. The president is asking federal agencies to address this problem. BLM is now working with local governments in Southern Nevada on additional support, as I noted, and that the Biden-Harris administration is also calling on state and local governments and other public entities to follow our lead and consider whether land they hold may be suitable for housing development.

The opportunity is massive. New analysis released today estimates the development potential of underutilized state and local government plant -- land near transit -- transit locations at roughly 1.9 million units.

Additionally, tomorrow, HUD is announcing $325 million in Choice Neighborhoods Implementation Grants, which is funding to communities across the country to build more homes and revitalize neighborhoods that have been left behind. That funding will go towards Choice Neighborhoods. They -- this funding goes to the largest place-based program that exists within the federal government.

Choice Neighborhoods -- the Choice Neighborhoods program has transformed communities nationwide. With each year's annual appropriations, HUD is looking to expand the program's reach to as many communities as possible.

So, with that, we are thrilled with the work that has been undertaken. The private and public sector are stepping up, but it is really critical that we move this ball forward. And that is why the president is excited about making these announcements tomorrow. And Las Vegas Choice Neighborhoods funding will help provide low-income housing along the historic Jackson Avenue strip.

And as I said, our focus is on "building, building, building" additional units. This will continue to be a major focus for the administration in the weeks and months ahead as we do everything we can to build more housing and lower housing costs.

And with that, I am pleased to turn it over to a great leader and my friend, Congressman Steve Horsford.

REPRESENTATIVE HORSFORD: Thank you so much, Director Tanden. It's great to be on with you. And, Lael Brainard, thank you for your leadership and work on this as well.

And good afternoon, everybody. I'm Congressman Steven Horsford. I'm proud to represent Nevada's 4th Congressional District. And I appreciate very much the opportunity to discuss just how important these housing announcements are and its impact to my constituents here in Nevada's 4th District.

Now, we know housing is a fundamental issue that affects all aspects of our lives, from economic stability, to health and education. Today's announcement by President Biden is a significant step forward in addressing the housing crisis here in Southern Nevada, as well as all throughout the country.

But we must continue to push for more comprehensive solutions to ensure that everyone has a fair shot at being able to afford the rent -- because I agree with many of my constituents who think that "the rent is just too damn high" -- as well as to get in the position to own a home and to live in a safe and secure environment.

Now, President Biden is taking a stand against corporate landlords who exploit the national housing shortage by raising rents unfairly. The president is calling on Congress to pass a law to cap rent increases at 5 percent. Similar to some of the executive powers that were -- that are provided for in my bill, the HOME Act.

This policy targets large landlords with more than 50 units and encourages rent stabilization by making it less attractive for corporate landlords to raise rents because they would lose valuable tax benefits if they chose to do so.

My HOME Act would give the president the fex- -- flexibility to define a housing emergency and to protect renters from the egregious price increases that we've seen in the last few years.

Also, the Federal Housing Finance Agency is working to implement new renter protections, which I applaud, for properties that are financed by Fannie Mae and Freddie Mac. These include 30-day notices before increases and lease expirations take effect and a 5-day grace period for late fees. These are essential renter protections that are also part of my HOME Act, which aims to prevent unfair rent hikes and ensure basic renter protections in federally backed properties.

Our advocacy and dialogue with key stakeholders helped to make these protections a reality, and I'm pleased that they're included in today's announcement.

I also want to commend the administration's plan to include using federal land to build thousands of affordable homes focusing here in Nevada. The largest-ever sale under SNPLMA, the Southern Nevada Public Lands Management Act, will help Clark County develop nearly 150 homes, and similar efforts that are pending in Henderson will provide nearly 300 affordable units.

The Bureau of Land Management is considering over 562 acres of land to be designated and prioritized for affordable housing here in Las Vegas. This could potentially support up to 15,000 more affordable units.

I'll continue working with local authorities and stakeholders to identify and advocate for more land for housing because we know that this is a top priority. These are crucial steps that are being taken. And, again, we need quicker and more decisive action to free up public land and to streamline the development process to meet our housing needs.

The administration will continue to work with us to provide the resources that are necessary to ensure an accelerated transfer and development of these lands.

Finally, let me commend the work that's being done around the Choice Grants. I'm excited that as part of a national award that, after years of advocacy, the Department of Housing and Community Development has awarded or will award $50 million to restore and expand Marble Manor in the historic Westside neighborhood of Las Vegas.

This is the neighborhood that I grew up in. I have friends that lived in -- lived in and residents and constituents who live in Marble Manor today. This investment will restore 235 affordable units and build 400 more. Let me say that again: It will restore 235 affordable units and build 400 additional units.

It will also fund infrastructure improvements: a co-op market, something that we desperately need to address the food desert shortage of not having adequate supermarkets in our neighborhood. It will provide for a preschool, additional parks, a health and wellness center, as well as support business expansion and economic development.

Our efforts have helped to bring an additional $212 million in public and private resources for these projects -- projects, showing that there really is power in partnerships to revitalize our communities.

This is not something that we can do through government alone. But this $50 million investment from the Choice Grants will definitely help us advance these projects further.

Finally, I'll conclude by thanking the Biden-Harris administration and their actions which reflect a broad approach to tackling the housing crisis by building more homes, tapping rent increases, and investing in community development.

While today's announcement is a big step, we will continue to work with the administration to find other ways to take it executive action and legislative support. And I'm calling on my Republican colleagues on the Financial Services Committee -- I'm a member of that committee -- to work with the ranking member, Maxine Waters; the subcommittee ranking member, Emanuel Cleaver; and myself to continue to support and to fully address the housing shortage and affordability issues. There's a lot of good, bipartisan bills that we could work on, even now, if Republicans would come to the table.

So, I remain committed to pushing for stronger measures and ensuring that our community's needs are met. I've long called for an all-of-government approach to confronting our housing crisis. And I'll continue to utilize every tool that's available to us to provide Nevadans with the relief that they need.

Today's announcement is a victory for Nevada and a testament to what we can achieve through persistent advocacy and collaboration. Our work is far from done, but I look forward to the partnership with the Biden-Harris administration and those of us who see affordable housing as a priority for all Nevadans and Americans.

So, thank you for allowing me to participate today.

MR. EDWARDS: Thank you, Congressman. With that, we're going to turn over into our background portion of the call for some Q&A.

We have speakers who are from HUD, as well as NEC and DPC.

So, with that being said, please use your "hand raise" function. We'll get a queue going, and we'll get started I think in, like, 30 more seconds. Thanks.

All right. Thank you, again. Reminder that this is going to be on background, attribution to "senior administration officials," and that this will also be embargoed until 5:00 a.m. tomorrow.

So, with that, I am going to take our first question from Josh Boak with the Associated Press. Josh, you should be able to unmute.

Q: Hi. It's Josh Boak with AP. Thanks again for doing this. Could you walk us through the timing of how this came together, and why now? Some affordability advocates say that had policies like this been in place, you would have reduced homelessness post-pandemic, while some of the industry look at this and say this is tied to election messaging.

SENIOR ADMINISTRATION OFFICIAL: Hey, everyone. It's [senior administration official]. I can take that. So, as you know, we have been deeply focused on this issue of housing affordability since the president came to office. It is one that has evolved in the time that the president has been to office. So, early in the administration, we were deeply focused on doing everything possible to keep families in their homes during the pandemic, a historical provision of rental assistance and support to state and local governments to help keep families in their homes.

We then, you know, really aggressively turned to the issue of building more housing, you know, addressing the long-standing shortfall in housing supply -- in the supply of housing in this country both through putting out a Housing Supply Action Plan that included concrete steps to increase housing supply, administrative actions wherever we could take them -- things like improving the Low-Income Housing Tax Credit, improving Rescue Plan funds to make it easier to use those to build housing, including land use and zoning as important criteria that would make it easier to get federal funding from the Department of Transportation and other entities.

And, you know, then, I think, really, to build on that, have focused on what else we could do to help provide aspiring homeowners and renters relief in a kind of bridge period as it takes time for that new supply to come online. So, one of the things you'll see in today's propo- -- in today's proposal is it really is -- we think of it as a bridge to, you know, additional supply coming online: the 1.6 million units that are under construction now, the 2 million units that would be built if the pre- -- if Congress passed the president's proposal, and now this legislative proposal that, you know, would be an important bridge to that new supply coming online.

You know, this is an area that, you know, the -- the president, in the lead-up to the State of the Union, encouraged his team and asked his team to do more on. He spoke to housing issues in the State of the Union and, since then, has continued to -- to push the team to do more.

This specific proposal is one that, you know, we've been working through for several months. The president has kind of teased at this issue twice in the last several weeks. So, this is not a new issue to us; it's one that we've been working through. And, of course, the housing issue generally is one that this administration has been deeply focused on for three and a half years.

MR. EDWARDS: Thank you for that response.

Before we take our next question, I just want to note that we also have a representative from the Bureau of Land Management on as well to be helpful there as needed.

Our next question is going to come from Emily Peck from Axios. Emily, you should be able to unmute now.

Q: Hi. Thank you. Thanks for doing this. I think you might have already answered my question. But just to be clear, the -- the proposal to cap rents for the next two years, that's something you're asking Congress to do? Is -- do you have any indication that Congress would be able to do something like that?

SENIOR ADMINISTRATION OFFICIAL: Yeah, this is a legislative proposal. It would deny depreciation deductions over the next two years for corporate landlords, so above 50 units -- they hold -- that hold above 50 units that are raising their rents by more than 5 percent.

You know, this is an issue that is affecting households across the country, families across the country. Housing is an issue that we absolutely must do something about.

The president has put forward plans to build more housing. This plan goes along with that, and we think that Congress absolutely should be taking action here.

MR. EDWARDS: Thank you, [senior administration official].

We're going to go to Jeff Mason from Reuters. Jeff, you should be able to unmute yourself.

Q: Thanks so much. Follow-up on Emily's question. So, just to clarify, it's a legislative proposal, but I think we all know that there's -- it's very unlikely that Congress is going to be doing anything between now and November. What gives you an- -- other than saying they should do it, what -- what gives you any sort of sense that they will?

And as a second question, can you just clarify the second part of the proposal that you guys are walking us through? Where does the money come from for that, for the housing piece in -- in Nevada?

SENIOR ADMINISTRATION OFFICIAL: I'll take your second question first. So, the -- the -- of the announcements from today, the public lands piece is administrative and then the -- the money for -- really, around the country, but the specific $50 million piece for Nevada, that comes from funds that were already appropriated by Congress.

On the -- on the first part of your question, you know, when the president, you know, teased at this issue in Michigan on Friday, you know, he laid out that this is a proposal that he would fight for in a second term. It's one that we think Congress shouldn't wait to act on. You know, we put out a budget every year that includes proposals that really reflect the president's vision and what we believe Congress should be doing. This is one of those proposals.

I'll leave to you all the precise chances for Congress acting now, for Congress acting later.

But I think the bottom line is that this issue of housing affordability is one that is felt in communities across the country -- urban, rural, suburban, Democratic districts, Republican districts. It's one that we need to do more on.

MR. EDWARDS: Thank you. Our next question is going to come from Brian from NBC. Brian, you should be able to unmute now.

Q: Thanks, Jeremy. Thanks for doing this. I wanted to ask just for a little bit more just projections on what the impact of that cap would be on landlords. I was reading that, you know, it would apply to landlords with over 50 units in their portfolio, covering more than 20 million units across the country. So, is 20 million units the estimate of how many units would be affected by that cap or beholden to that cap?

And then is there any sort of other economic analysis -- not asking for an exact CBO score here -- but just on, like, how much in aggregate this could lower rental inflation in the United States? Like, any estimate on the economic impact of a cap like that being taken into effect? Thanks.

SENIOR ADMINISTRATION OFFICIAL: Yeah, the 20 million or the, you know, somewhat less than half of all rental units nationwide, that's held by, you know, property owners with 50 or more units. Look, our expect- -- our hope and our expectation would be that, you know, there wouldn't be a significant, you know, revenue raising here because -- in terms of a kind of CBO-type estimate -- because landlords would comply with this.

We -- we've had a period of substantial rent increases in prior years. We have a lot of supply coming online. We think there's every reason that landlords would comply with this proposal. And that's particularly true if the depreciation deduction would be denied if they don't.

So, we don't have a precise budgetary estimate. But I think that this is a choice -- if landlords are faced with this choice in this next two-year period, you know, many, many, and hopefully most landlords would be compliant here.

MR. EDWARDS: Thanks for that answer. We're going to go to Jacob from Scripps. Jacob, you should be able to unmute now.

Q: Thanks, Jeremy. And thanks so much for all the folks doing this call. Just a couple of questions, one trying to get at something some of the folks had asked about earlier and then another on a different topic.

You know, thinking about the feasibility of this proposal actually having any sort of, you know, ability to become law through Congress, does the president have any plans to perhaps, you know, use the bully pulpit a little bit more? Can you preview any conversations he may have had or may have with lawmakers trying to push for action on this -- the proposal -- the rent cap one, specifically?

And then, secondly, just hoping you can provide a little bit of background perhaps about this engagement you've had with stakeholders thus far -- both, you know, perhaps affordable housing advocates, also, you know, developers and construction companies -- and those who might not be too happy with this.

SENIOR ADMINISTRATION OFFICIAL: Sure, I'll -- I'll take the second one first.

So, you know, as part of our policy development on housing in general, we are, you know, consistently seeking advice and feedback from experts that range from, you know, academic experts, to housing developers, to renter and tenant advocates. We -- we're in touch with a range of expert- -- experts across the spectrum in designing this proposal, as was the case for our proposals to build 2 million units. So, you know, you'll -- you'll see that, obviously, the idea of trying to put in place a cap is one that a number of renter advocates have advocated for.

We also -- in consulting with industry, we're really adamant in this proposal to make sure we were exempting new construction, exempting substantial rehabilitation, really emphasizing that this is a proposal that's paired with new supply proposals, because we wanted to make sure -- based on their feedback, but also the kind of economic needs out there -- that we weren't having a negative impact on supply.

On your first question, I don't have any conversations to read out to you on this proposal, specifically. Obviously, he'll announce it tomorrow. But, you know, we -- we look forward to further conversations on this proposal with key stakeholders, with members of Congress.

You know, we will continue to advocate for additional investment in housing. We'll continue to advocate for policies that lead to the construction of more housing across the country. And tomorrow, you'll hear from the president discussing that he thinks that this proposal could be a really helpful bridge to getting to that additional supply.

MR. EDWARDS: Thanks, [senior administration official].

We have time for a couple more questions. So, I think we're going to go over to Elizabeth from ABC. Elizabeth, you should be able to unmute now.

Q: Thank you so much. I just wanted to get at that question about the practicality of this. Have there been any conversations at this point between the administration and members of Congress about how this could get done? Thank you so much -- the rent cap, of course.

SENIOR ADMINISTRATION OFFICIAL: Again, I don't have a specific conversations to read out to you, but we are constantly -- across the administration, at the level of the president -- have had, you know, many conversations over the last months, in particular, on what more we can do to address the housing affordability challenges that folks across the country are -- are experiencing.

MR. EDWARDS: Thank you. We're going to go to Amy next from CBS. Amy, you should be able to unmute.

Q: Yeah, thanks. Thanks for taking my question and hosting this call. I just wondered if you can talk a little bit more about the faster depreciation that you're targeting with this proposal. I'm wondering, you know, how much of a financial impact would this -- losing that really have on corporate landlords? And why wouldn't they just say, "Well, you know, I can raise the rent 10 percent. It will offset losing that depreciation"? Or, you know, is it not equal? I'd love to hear a little bit more about that.

And, secondly, do you have any sense of whether corporate landlords have been increasing their rents more than 5 percent a year on average in the past few years? I'd love to hear a little bit about that, too. Thanks.

SENIOR ADMINISTRATION OFFICIAL: Yeah. (Inaudible.)

So, the second, obviously, you know, it depends. There's significant (inaudible).

MR. EDWARDS: Hey, [senior administration official]. [senior administration official].

SENIOR ADMINISTRATION OFFICIAL: Yeah?

MR. EDWARDS: Sorry to jump in on you. I -- I just -- I was getting, like, a lot of feedback. Yeah. If you could -- sorry. Sorry, to jump in late there, but I wasn't -- if you're able to, like, fix your phone or jump back into that question again, I think that would helpful for our folks here. Sorry.

SENIOR ADMINISTRATION OFFICIAL: Is this better?

MR. EDWARDS: Not really.

SENIOR ADMINISTRATION OFFICIAL: What about now? What about now?

MR. EDWARDS: That's a little better.

SENIOR ADMINISTRATION OFFICIAL: Okay. (Inaudible.)

MR. EDWARDS: Yeah, I'm sorry -- I'm sorry, but it's still -- it's just getting, like, robot voice.

And we're actually kind of towards time. So, I think we can split the diff, or if [senior administration official] wants to jump in perhaps, that could be helpful. Do you have a -- do you have an answer to provide here, [senior administration official]? Otherwise, we can always offline with you and get you a response to that question.

So, I'll give [senior administration official] a moment to maybe jump in. But otherwise, I think we can just leave it there and --

SENIOR ADMINISTRATION OFFICIAL: Ye- -- yeah. Can you hear me okay, Jeremy?

MR. EDWARDS: Yeah, yeah.

SENIOR ADMINISTRATION OFFICIAL: Yeah, probably -- probably best for [senior administration official] to get back to you.

What I -- what I can say is that, you know, certainly during the pandemic -- 2021, 2022 -- we saw, you know, many instances across the country of landlords raising rents, you know, far exceeding -- exceeding 5 percent in a way that we saw, you know, as egregious.

And so, but in terms of year over year, we can -- we can probably follow up with you on, you know, the last, you know, five or eight years in terms of what we've seen in terms of average annual rent increases.

SENIOR ADMINISTRATION OFFICIAL: And is this better? I'm on my phone now.

SENIOR ADMINISTRATION OFFICIAL: Yeah, that's much better, [senior administration official].

MR. EDWARDS: (Inaudible.)

SENIOR ADMINISTRATION OFFICIAL: Okay. I'll go. And so, I don't have anything to add to -- on that part of the question that [senior administration official] covered.

And then, on the other part, so, right now, residential real estate has an accelerated depreciation schedule as compared to other forms of real estate. It's 27 and a half years compared to 39. We would, under this proposal, deny depreciation deductions altogether in the year that the rent was increased by more than 5 percent.

It's, you know, a relatively complicated calculation to understand what the kind of break-even point for a landlord is. But -- and it -- and it varies based on things like the -- how valuable the land is as compared to the property, how -- what the current tax rate is of the landlord, whether they're a corporation or a partnership.

But if you look across scenarios, our analysis is that it's – it's the -- the break-even point is going to be well above 5 percent and often significantly above 5 percent. So, that -- it will be a better deal for the landlord to comply with the cap and not give up depreciation.

MR. EDWARDS: All right, thank you for that. And at the risk of any more technical difficulties, I think we'll call it there.

So, folks, if we weren't able to get to you, I do apologize. Feel free to follow up with us over email. You have my email. You can reach out to [redacted]. So, again, feel free to follow up, and we do appreciate your time and covering this.

And as a final reminder, background was attributable to "senior administration officials" for the Q&A portion and the embargo will lift tomorrow at 5:00 a.m.

Thank you, again, and have a great evening.

6:01 P.M. EDT