• Home
  • Stock News
  • The Rental Trap: ‘We feel like it’s rent gouging’: Renters meet with Biden administration officials to decry steep increases by landlords

Post: The Rental Trap: ‘We feel like it’s rent gouging’: Renters meet with Biden administration officials to decry steep increases by landlords

With rental prices rising nationwide, there has never been a better time to examine how high housing costs impact everyday AmericansThe Rental Trap is a new MarketWatch column profiling tenants’ issues, including renters who spend a high portion of their income on housing.

In late July, with consumer prices soaring nationwide, tenants from across the country descended on Washington, D.C., to meet with some of the Biden administration’s top housing officials — and make them contend with the real-world impact of a painful cost-of-living crisis.

While everyday Americans have been reaching into their savings accounts or cutting back on other necessities as a result of higher prices across the board, housing is already such a substantial part of many households’ budgets that it can be difficult to adjust. So as inflation increases — rent prices were up 6.3% in July compared to a year ago, according to data released by the Labor Department Wednesday — many tenants are left to face a hard truth.

They can spend a higher share of their income, compete for a cheaper slice of the nation’s declining affordable housing stock while financing a move, or potentially face eviction, a blemish on a tenant’s rental history that can make it tremendously difficult to find a place to rent down the line. 

Unsatisfied with that reality, a delegation of 13 tenant leaders organized through the progressive national Homes Guarantee campaign at People’s Action, a grassroots group, set out to the nation’s capital to share their stories and pitch a variety of progressive changes to the Biden administration, including a national landlord registry for better accountability and caps on rent increases.

They met with officials from the White House’s Domestic Policy Council and National Economic Council, as well as the Consumer Financial Protection Bureau (CFPB), U.S. Department of Housing and Urban Development (HUD) and Federal Housing Finance Agency (FHFA).

Myriad plights faced by struggling renters

The renters were representative of the myriad plights currently faced by tenants as the price of shelter balloons: a disabled veteran on a fixed income who can’t afford a rent increase, a single mother who can’t find a place to live with a Section 8 voucher, and a man who can’t get an affordable home due to an eviction on his record, among others. 

“We basically just went to talk to them about the rent hikes. We feel like it’s rent gouging,” Vichelle Sanders, a 59-year-old Las Vegas renter, nonprofit worker and leader with Progressive Leadership Alliance of Nevada told MarketWatch of the visit to D.C. “We talked about possibly getting a meeting with President Biden so that he can become aware that inflation is more than just gas prices.”

For the most part, she said, leaders seemed receptive.

“These types of meetings, held by the types of leaders that we organized through the delegation, are nothing short of historic,” said Tara Raghuveer, the director of the national Homes Guarantee campaign for People’s Action. “It’s game-changing to have people who have been directly impacted by rent increases, COVID evictions in the room with policymakers who, frankly, really need to hear from their experience and learn from their expertise.”

‘These types of meetings, held by the types of leaders that we organized through the delegation, are nothing short of historic.’

— Tara Raghuveer, director of the national Homes Guarantee campaign for People’s Action

Across all of the meetings, Raghuveer said, the emphasis was on rent inflation and what the administration could do to combat it. While Raghuveer said they didn’t get many answers, tenants nonetheless got clarity on “how various officials across these agencies see their role, how they’re thinking about it, and how we need to continue pushing the administration to develop a very precise strategy around rent inflation that has everything to do with executive and agency-level actions to regulate rent.” 

The White House did not immediately respond to MarketWatch’s request for comment. A spokesperson for the CFPB, however, said that director Rohit Chopra. and other staff members who met with the delegation, appreciated the opportunity to speak with “representatives of the People’s Action Homes Guarantee campaign, to hear their stories, and to listen to their ideas,” and looked forward to “continued engagement.”

A spokesperson with FHFA said the agency “regularly engages with groups and stakeholders on the important issue of equitable, sustainable and affordable housing.” HUD Secretary Marcia Fudge said in a tweet July 21 that she was grateful to hear from tenant advocates, adding she was “committed to continued tenant engagement to inform decision making and meet the needs of tenants across the country.”

30% rent hike for a substitute teacher

Some tenants need those decisions to come sooner rather than later. Another renter who went to D.C. last month, Nancy Capron, is an extremely low-income 56-year-old substitute teacher and leader with Neighbor to Neighbor Massachusetts living in the city of Holyoke, Mass.

She makes somewhere between $12,000 and $17,000 each year, and her landlord — whom Capron otherwise described as “more than generous” — notified her earlier this summer that her rent would increase by about 30% to $755 a month, eating up most of her income. (Capron’s landlord did not immediately respond to MarketWatch’s request for comment.) 

Since costs are going up across her city, she said, she cannot find a cheaper alternative. 

“In my opinion, you either regulate wages to meet the cost of living, or you regulate the cost of living to meet the wages,” Capron said. “I’m not a genius, I’m not a policy person, I’m not educated in this — I’m sure that analysis is super simplistic. But if you’re just a human being who’s trying to figure out how to live … what’s the level of displacement where Americans will be like, ‘OK, that’s not right?’”

‘You either regulate wages to meet the cost of living, or you regulate the cost of living to meet the wages.’

— Nancy Capron, 56, a substitute teacher who earns $12,000 to $17,000 a year

But the trip to D.C., she felt, was representative of how a democracy should work, even if the circumstances that brought tenants there were troubling.

“People were open, they were empathetic, they listened, they thought about our policy suggestions,” Capron said. “The most interesting was the folks from FHFA. They’re the numbers people, and they were very engaged in the conversation and had some ideas.” 

Some of the group’s demands — which many property owners would surely balk at — were also reiterated in a memo signed by tenant unions, community organizations and legal partners Tuesday.

The memo called on the White House and several agencies to take action, saying the FHFA should direct Fannie Mae

and Freddie Mac

to regulate rents imposed by borrowers of federally backed mortgages, while the CFPB should “investigate corporate landlords using unfair tenant screening and debt collection practices to discriminate against tenants” or collect unpaid rent from the pandemic. 

Paula Cino, the vice president for construction, development and land use policy at the National Multifamily Housing Council, a landlord group, said that fewer regulations should be considered for bringing down housing costs. The group has advocated for solutions that ramp up housing supply instead.

“Really, the last thing the industry needs is more regulation,” Cino said.

Research from the NMHC and the National Association of Home Builders based on a survey of 49 developers also found nearly half would avoid building in an area with inclusionary zoning rules requiring that a certain number of their units be rented at a below-market rate. Almost 88% said they’d avoid working in cities with rent control, which, the organizations said in a statement, “translates into housing not being built in many areas where it is so desperately needed.”

Some tenant advocates, though, see rising rents as a consequence of corporate greed too. And they’re willing to fight for change.

“A lot of the tenants in the delegation left those meetings feeling like they weren’t alone in their pain, and they aren’t alone in their vision for what needs to happen,” Raghuveer said. 

If you want to email the author, or if you are a tenant who spends 50% or more of your income on rent, contact emma.ockerman@marketwatch.com.

Add Your Heading Text Here

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.

Market Insiders