Billionaire Democrat real estate investor reveals unintended consequences of Biden’s rent cap proposal
Billionaire real estate mogul and former Democratic gubernatorial candidate Jeff Greene sounded off on President Biden’s "completely ridiculous" plan for national rent control, warning that it stunts new buildings and fair prices.
"It makes no sense at all. I can see it on the primary [basis], if you're trying to really go after the far-left people who don't know anything about housing. But in a general election, when he's trying to appeal to independents and moderates, I have no idea why he would come up with such a crazy idea," Greene said in an exclusive interview on "The Claman Countdown" Wednesday.
Earlier this week, Biden announced a plan to stop the astronomical rise in rent by penalizing corporate landlords who raise rents by more than 5% each year.
If landlords did not restrict rent increases to 5% or less, they would risk losing access to lucrative tax breaks.
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The proposed rule would apply to landlords with more than 50 units, which would cover more than 20 million units or about half the rental market in the country, according to a fact sheet from the administration.
Greene, an active member of the Democrat Party and a candidate in the 2010 Senate election primaries in Florida, has earned billions of dollars from his real estate investments over the years. He first experienced rent control while attending Harvard Business School and purchasing a home in Somerville, Massachusetts.
"It was causing people to not fix up their properties. There was no development whatsoever," Greene said. "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."
He also conducted business in Los Angeles where the city law, "which made no sense," froze rents on any apartments built before 1978.
"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 were market rents. And the biggest, craziest thing from all this," Greene explained, "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."
Now, as he primarily resides and works in the Sunshine State of Florida, Greene said "we have no rent control whatsoever. Apartments are getting overbuilt, rents are dropping, and you can just see it give real estate investors, developers an incentive to go out and create more housing."
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The proposal would need to garner congressional approval in order to become law. With a Republican-controlled House and a Democratic-controlled Senate, the plan is unlikely to gain much traction.
"While the prior administration gave special tax breaks to corporate landlords, I’m working to lower housing costs for families," Biden said in his Tuesday announcement. "Republicans in Congress should join Democrats to pass my plan to lower housing costs for Americans who need relief now."
FOX Business’ Megan Henney contributed to this report.