Why Billionaire Real Estate Mogul Disagrees With Biden’s Plan To Reduce Housing Costs
A few days before President Joe Biden announced the end of his reelection campaign, he released a new plan to combat high housing costs. In a statement issued by the White House, Biden listed his detailed strategy, which includes building 2 million new homes and providing $10,000 in mortgage relief to make homeownership a reality for more Americans.
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The Biden plan calls for:
Giving corporate landlords a choice to either cap rent increases on existing units at 5% or risk losing current valuable federal tax breaks
Repurposing land to enable tens of thousands of affordable homes
Calling on state and local governments to build more affordable housing on public lands
Investing $325 million in housing and community development to build new affordable homes, revitalize neighborhoods and spur economic development
According to the July 16 fact sheet, Republicans in the House and the Senate do not support the plan and have blocked the proposed agenda to build new affordable homes.
However, Republicans aren’t the only ones who reject Biden’s housing plan. Billionaire real estate mogul and former Democratic gubernatorial candidate Jeff Greene recently spoke out on Fox Business’ “The Claman Countdown” about the rent control portion of the initiative, calling national rent control “completely ridiculous.”
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Rent Control Doesn’t Work
Countless Americans are struggling with high rent prices and inflation, but Greene, who got started in real estate while at Harvard Business School and experienced rent control early on in Somerville, Massachusetts, stated it doesn’t work.
“It was causing people to not fix up their properties. There was no development whatsoever,” Greene stated. “I was the force behind eliminating [rent control] from Somerville. And what happened after that was an enormous amount of new development. All these homes got fixed. Rents did not go up because there was more supply.”
Rent Control Has Consequences
Greene expanded his real estate business to Los Angeles, where he said rent control “made no sense” because it froze rent on many apartments that were built before 1978, causing unintended issues.
“So you would have two identical buildings next door to each other: one would have frozen rents that could go up 2 or 3% a year, and the other was market rents. And the biggest, craziest thing from all this is that it disproportionately benefited people who were wealthy. We did studies of who the people [were] in these apartments. It wasn’t low-income people. Low-income people were not playing this game. They were not benefiting.”
Why No Rent Control Works
Today, Greene concentrates much of his real estate business in Florida where there’s no rent control, and he explained why it’s effective.
“Apartments are getting overbuilt, rents are dropping and you can just see it give real estate investors [and] developers an incentive to go out and create more housing, and you will have a tremendous amount of supply, rents will drop. If you do the opposite, you can see what’s happened.”
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