Spend the Housing Subsidies on the People Who Need It

Barbara Sard:

Meanwhile, the nation’s lowest-income renters are far likelier to struggle to pay for housing — and their affordability problems are growing.

A renters’ credit, administered by states and capped at $5 billion a year, could:

  • Assist about 1.2 million of the lowest-income renter households;
  • Reduce each household’s rent by an average of $400; and
  • Lift 250,000 families out of poverty and lift four of five of the poorest families it assists out of deep poverty (defined as having income below half of the federal poverty guidelines).

It’s the right time to consider such a credit, as policymakers consider restructuring tax expenditures as part of tax reform.  Proposed changes to the mortgage interest deduction (such as converting it to a credit) could make homeownership-related tax expenditures more efficient and raise added revenues to reduce the deficit.  And, by directing a modest share of the savings from these or other tax reforms to the renters’ credit, policymakers could make the nation’s housing dollars fairer and more effective.

Comments

  1. John says:

    First off, agree 100% – we should never spend scarce resources supporting people who don’t need it. Feel free to admit you’re wrong on social security means testing any time now.

    Second, any plan to remove the mortgage interest deduction would need to be phased in over a minimum of 10 years if not longer, or the impact to the economy would be like 1,000 Obamas all at once.

    • Jon Geeting says:

      Social Security is different. The case for a universal backstop for financial immiseration in old age is strong. The case for a universal subsidy to top up housing consumption is weak. I support phasing it in, although I think it’s “funny” that Republicans don’t want to phase in their Medicaid cuts, and start them basically immediately in the Ryan budget.

  2. John says:

    Universal backstop for social security absolutely – always help people who need it. Universal requirement to take it whether you need it or not is inane.

    Speaking of helping people, have you ever started volunteering yet? Really help people who need it? Political activism doesn’t count.

    Don’t be a leech on society Jon. You’re lucky; it’s your responsibility to help others. Coach a youth team. Work a soup kitchen. Join a nonprofit board. Do something.

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