With the billions in tax subsidies allotted to billionaires through last year's tax changes, this legislation provides a refreshing contrast for working families who struggle daily," says Mayor Sam Liccardo of San Jose, where it's illegal to build multi-family housing in some 75 percent of the city.
"Senator Harris' legislation would help protect millions of families from losing their homes, by expanding benefits and opportunities for people who pay rent every month," declaresLos Angeles Mayor Eric Garcetti, who wholeheartedly endorsed development fees in Los Angeles that add between $5,616 and $10,530 to the costs of building an average-sized one-bedroom apartment.
Yet both the fairness and the economics of the proposal leave a lot to be desired, says Lynn Fisher, a housing policy expert with the American Enterprise Institute.
"We would be asking the whole United States to subsidize the bad behavior of some locales that are artificially pushing up rents by not allowing more building to happen," says Fisher.
In contrast to the rhetoric about helping hard-pressed renters, Fisher notes, Harris' plan would shower benefits on a staggering number of tenants, including relatively high-income ones. The Rent Relief Act would give tax credits for people earning as much as $100,000 a year and renting out apartments that cost up to 150 percent of an area's median fair market rent.
Americans' earning $25,000 or less would give a tax credit worth 100 percent of the portion of their rent that exceeds 30 percent threshold of their income. Those staying in government-subsidized housing—where rents are capped at 30 percent of a tenant's income—would get a tax credit worth a whole month's rent.
The costs of utilities would be included in rent costs. Because the tax credit is refundable, even those with no tax liability would still get a check.