Increasing rent prices leave many American families struggling to afford housing, but Senate Democrats have introduced new legislation to help alleviate that stress.
The Rent Relief Act, introduced by Sen. Kamala Harris, D-Calif., and endorsed by Sens. Dianne Feinstein, D-Calif., Richard Blumenthal, D-Conn., and Maggie Hassan, D-N.H., aims to create a new, refundable tax credit, that “puts more money in the pockets” of families, especially at a time when rent prices are outpacing wage growth.
Harris believes that bolstering the economic security of working families will strengthen the country and increase opportunity.
"America’s affordable housing crisis has left too many families behind who struggle each month to keep a roof over their head,” Harris said. “This bill will ensure no family is priced out of the basic security of a place to live.
The Rent Relief Act will award refundable tax credits to renters that pay more than 30% of their gross income for the taxable year on their rent including utilities. This incentive could potentially help many low-income black and Latino households that struggle to afford monthly payments.
Zillow recently reported that a disproportionate percentage of blacks and Latinos could not afford to rent. In fact, the divide is so large that in 28 of the largest 50 metros across the country, including San Francisco, Los Angeles and Boston, typical black households can afford fewer than a third of the rental listings that typical white households can afford.
Harris says that eligible individuals can qualify for tax benefit by determining the total amount spent yearly on rent, based on the federal government’s established fair market rent controls and the family’s annual income.
“A new tax credit for renters - like the one proposed by Senator Harris - could transform lives, providing millions of the lowest income people with the breadth of opportunities that start with an affordable home opportunities to climb the economic ladder, improve their health, and allow children to do better in school," President and CEO of the National Low Income Housing Coalition Diane Yentel said.
Furthermore, data recently released by RentCafé and Yardi Matrix revealed that rents nationwide crossed the $1,400 threshold, hitting an all-time high.
Last year, Rep. Joseph Crowley, D-N.Y., also introduced a similar rent relief act in the House of Representatives that would offer refundable tax credits to people who live in rental housing.