“Strike Force” and Junk-Fee Bans Could Exacerbate High Housing Costs

In the days leading up to the recent State of the Union address, the White House introduced a new “strike force” to take on “unfair and illegal” corporate pricing. The Federal Trade Commission (FTC) and the Department of Justice (DOJ) will jointly lead this effort. Simultaneously, the Consumer Financial Protection Bureau (CFPB) finalized a controversial rule severely limiting credit card late fees.

During his address to Congress, the President identified housing as one of the key sectors where the strike force will focus its efforts to “root out and stop illegal corporate behavior that hikes prices on American families through anti-competitive, unfair, deceptive, or fraudulent business practices.” He also outlined plans to implement a temporary $400 per month tax credit for first-time homeowners to address rising mortgage costs and stated that his administration is “cracking down” on landlords whom he alleged are in violation of antitrust laws by “price-fixing and driving up rents.” Many of these initiatives sound good on paper and—in a vacuum—they could make life easier for many Americans. But, as always, the devil is in the details. What the speech did not highlight or even mention are the recently issued regulations that could make it harder for housing providers to conduct business. These regulations could limit their ability to increase supply and address the demand for more affordable housing—the very problem the President aims to fix.

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