Relief In The Form Of Tax Credits Proposed For Places Where The Rent Is Too High
Sen. Kamala Harris has unveiled a bill called the Rent Relief Act that would provide tax credits to renters who spend more than 30% of their gross income on rent and utilities.
The credit would be available to households who make less than $100K/year, or $125K/year in high-cost markets like Harris' home state of California. The exact amount would depend on a household's size and its income.
The rising costs of housing, health care, child care, and education is squeezing more and more hardworking Americans out of the middle class. Passing the #RentReliefAct will put more money in the pockets of families. https://t.co/aYvpc5uERv— Kamala Harris (@KamalaHarris) July 23, 2018
The aim of the measure would be to help the expansive U.S. population of rent-burdened households. In the country's largest 53 metro areas, nearly half of the renters spend more than 30% of their incomes on rent, although that percentage dropped slightly between 2012 and 2015, according to a study by the Furman Center at New York University.
According to RentCafé and Yardi Matrix data, average apartment rents nationwide surpassed $1,400/month recently, which is an all-time high.
The bill isn't the first time that a member of Congress has floated the idea of a tax credit for rent relief. Last year, Rep. Joseph Crowley of New York introduced such a measure.
Last week, a larger, bipartisan group of senators introduced a bill to create an Affordable Housing Task Force, although that would go no further than provide recommendations to Congress on how to increase affordable housing options.
Critics of Harris' proposal weren't shy about making themselves heard. Besides ideological criticism, it was also pointed out that California is a difficult place to develop residential properties, and thus supply-constricted.
Absent, of course, are any reforms that would make housing easier to build. https://t.co/6uQ46yRtIW— reason (@reason) July 22, 2018
There is no estimate for how much such a tax credit would cost, but Harris’ bill was influenced by a similar proposal by the Terner Center for Housing Innovation at the University of California — Berkeley, the Washington Post reports. The Terner Center’s tax-credit proposal would cost about $76B/year.
For the moment, the pros and cons of the Harris bill may be moot, since the current Senate, much less the House of Representatives, is unlikely to consider such a proposal.