A roof over every head

The "American Dream" is often described as having a family, a house, and a luxury car. However, the reality is different, especially considering that more than 50% of Americans are renters. Renting has become a lifestyle choice for wealthier individuals due to its flexibility and ease of maintenance. However, for many Americans, renting is not a choice but the only option, and the situation has worsened.

The state of renters in America is challenging. While higher-income renters contribute to the demand for new apartments, millions of Americans who have no other alternatives face a tough rental market. Rent prices have increased by 0.7% nationwide since last year, reaching the highest point since 2022. This rise in rents burdens lower-income tenants the most, and even with a slight softening in the housing market, the problem persists.

A recent report indicates that in 2022, 22.4 million households spent over 30% of their income on rent and utilities, while 12.1 million spent over 50%. Eviction filings have also increased by over 35% in six major metropolitan areas compared to pre-COVID levels, contributing to a growing homelessness crisis.

To address these issues, the Biden administration has proposed withdrawing tax credits from landlords who increase rents by more than 5% annually, targeting larger landlords for two years. Additionally, Democrats plan to offer first-time homebuyers a $10,000 tax credit to improve access to single-family homes.

While these policies are well-intentioned, experts caution that they may not effectively solve the problem. Urban planners suggest that a tax credit could encourage building more housing units and could help provide a solution to the housing crisis, but a rent cap would be regressive as there is still a mismatch between supply and demand in certain regions, despite 1.6 million units under construction across the US.