How 2024’s Election Could Impact Minneapolis Housing Providers – Part 2

Earlier this week President Biden announced a plan to implement a 5% national cap on rent increases and urged Congress to pass the Biden-Harris Housing Plan.

Of course, the hint of rent control got the attention of Minneapolis and St Paul duplex, triplex and fourplex owners. There is no need to panic. The proposed legislation would penalize corporate multifamily owners with more than 50 units.

If passed, the proposal would stop housing providers who raised rents by more than 5% from using accelerated depreciation as a tax write-off. New construction buildings and properties that have undergone extensive renovations would be exempt.

The Federal Housing Finance Agency would also change policies around future properties financed through Freddie Mac and Fannie Mae. Borrowers would have to agree to provide a 30-day notice before implementing rent increases and a 5-day grace period on rent before imposing late fees.

President Biden is also proposing:

• Congress pass a mortgage relief tax credit of $10,000 for middle-class first time home buyers. This is the equivalent to reducing the mortgage rate on an average-priced home by 1.5%.
• Congress to pass a one-year tax credit of up to $10,000 to middle-class families who sell their starter home (homes below the area median home price) to another owner-occupant. The administration estimates this would benefit nearly 3 million families.
• Down Payment Assistance for First-Generation Homeowners. Similar to Minnesota’s first generation homebuyer program, President Biden would like Congress to provide up to $25,000 in down payment assistance to first-generation home buyers. The administration believes this would help 400,000 families.
• Expansion of Low-Income Housing Tax Credit to help build or preserve 1.2 more affordable rental units.
• Innovation Fund for Housing Expansion – This $20 billion competitve grant fund would support the construction of affordable multifamily rental units and new starter homes.
• Crack Down On Rental Junk Fees – Last summer Biden instituted voluntary commitments for major rental housing platforms to provide transparency by providing the total upfront rental costs on their platforms. The president would like to see things like convenience fees and trash collection passed through, if at all, at an actual cost basis.
• Expand Housing Choice Vouchers by including low-income veterans and kids aging out of foster care.

Of course, these proposals are subject to congressional approval and, in some cases, the president’s re-election.