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senate Bill S. 1106

Should the Feds Give Refundable Tax Credits to Help People Whose Rent Exceeds 30% of Their Gross Income?

Argument in favor

Many low-income and even middle-class households are struggling to make rent payments. Giving these families a refundable tax credit to help balance their budgets would go a long way towards stabilizing their circumstances.

Jim2423's Opinion
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08/07/2019
Might as well they are doing nothing to correct money hungry landlords here in Reno/Sparks area.
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Robert's Opinion
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08/07/2019
Why do we have homeless people? One is that they cannot afford to pay rent, food, medical costs, etc. something has to go. Rent should not be one of them. Minimum wages is not enough to live on. That is why we need subsidized housing, food stamps, medical care. Why can we not help those who cannot take care of themselves? Are they suppose to just go away and die somewhere?
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Jeffrey 's Opinion
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08/07/2019
Speaking from a place of need yes, my mom doesn’t have a job because she has a medical disability yet she can’t get disability payments because her case keep getting denied, due to age which is a bunch of bull. Anyways we have no income except for child support and what I make, and I am jobless right now, I believe this could help most get back on there feet.
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Argument opposed

As demonstrated elsewhere, government subsidies tend to simply drive up the cost of the good they subsidize. Thus, rather than helping low-income families, this bill will only further enrich landlords by allowing them to jack rents up even further.

JConrad03's Opinion
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08/07/2019
People depending on the government to survive is not good. We should be passing legislation to give the people more opportunities to jump higher in the class systems, not incentives otherwise. If you can not afford your housing, you should move as it seems fit. Be independent to better yourself, not dependent to risk losing everything about yourself.
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RAN's Opinion
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08/07/2019
This is stupid, be responsible and get a place you can afford. Move to a more affordable location, like out of the city. Still don’t make enough? get another job!
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Rick 's Opinion
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08/07/2019
Affordable housing! Get what you can afford! It’s called a budget!!! Live within your means!!!
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bill Progress


  • Not enacted
    The President has not signed this bill
  • The house has not voted
  • The senate has not voted
      senate Committees
      Committee on Finance
    IntroducedApril 10th, 2019

What is Senate Bill S. 1106?

This bill — the Rent Relief Act of 2019 — would create a refundable tax credit for individuals who pay rent for a principal residence that exceeds 30% of the individual's gross income for the taxable year.  The amount of the credit would range from 25% to 100% of the excess rent, depending on the taxpayer’s gross income.

Households would be eligible for credits in the amount of following percentages at the corresponding gross income threshold: 

  • Gross income < $25,000: 100%
  • Gross income between $25,000 and $50,000: 75%
  • Gross income between $50,000 and $75,000: 50%
  • Gross income between $75,000 and $100,000: 25%
  • Gross income over $100,000 (or $125,000 in a high-cost area): 0%

Rent that exceeds 100% of the small area fair market rent (including the utility allowance) for the residence could not be taken into account for the purpose of determining the amount of the credit. 

For individuals who reside in government-subsidized housing, the bill would allow a credit equal to 1/12 of the rent paid by the taxpayer (and not subsidized under the program) during the year with respect to the residence. 

To implement this bill, the Treasury Dept. would establish a program for making advance payments of the credit on a monthly basis.

Impact

Renters whose rent exceeds 30% of their gross incomes; residents of government-subsidized housing; refundable tax credit for eligible renters; and the Treasury Dept.

Cost of Senate Bill S. 1106

A CBO cost estimate is unavailable.

More Information

In-DepthSen. Kamala Harris (D-CA), a 2020 Democratic presidential candidate, reintroduced this bill from the 115th Congress to provide rent relief to working families struggling to pay their bills. In a press release, Sen. Harris called housing a human right that must be protected: 

“Housing is a human right, and we must act now to end the affordable housing crisis and provide relief to working families who are worried about making each month’s rent. Right now, nearly half of Americans couldn’t afford an emergency $400 expense – these families need help now. This is about more than just economics—it’s about the basic security and dignity that every American deserves to have in their own home.”

When she introduced this bill last Congress, Sen. Harris said

“America’s affordable housing crisis has left too many families behind who struggle each month to keep a roof over their head,” said Senator Harris. “This bill will ensure no family is priced out of the basic security of a place to live. Bolstering the economic security of working families would strengthen our country and increase opportunity.”

Matthew Desmond, author of “Evicted: Poverty and Profit in the American City,” expressed support for this bill last Congress: 

“The lack of affordable housing is a national emergency. Senator Harris is bringing heightened awareness to a crisis that’s been ignored for far too long. The Rent Relief Act reflects a strong commitment to ensuring that all Americans have access to a safe and affordable home.”

Daniel Yentel, President and CEO of the National Low Income Housing Coalition, expressed her organization’s support for this bill in the 115th Congress: 

"I applaud Senator Harris for her leadership in introducing this innovative, bold proposal, which would help struggling families who today face impossible choices between paying rent and meeting their other basic needs, including putting groceries on the table and taking care of their health. 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."

In 99% of counties in the U.S., a person working full time at the minimum wage can’t afford a one bedroom apartment at fair market rate. The Columbia Center on Poverty and Social Policy estimates that this bill would reduce the poverty rate by as much as 2.4%, lifting 7.8 million Americans — including over two million children — out of poverty.

Because refundable tax credits (like the one proposed in this bill) are paid out by the government even when there’s no income tax liability, they’re a frequent target of criticism by conservatives. 

Elaine Maag, principal research associate at the Urban Institute and Tax Policy Center, notes that providing housing aid through a tax credit offers both attractive advantages and defining drawbacks. She notes that this approach’s success would depend on the program’s scope — the bigger, the better — and that it would also require the IRS to “change and modernize.” Maag adds: 

“Today’s IRS faces extreme budget constraints. Congress doesn’t seem to be interested in allocating a substantial amount of money for them to modernize and update their systems. Asking them to do any additional task could be quite daunting.”

However, she also notes, “Every time a new program gets enacted in the tax system, we say, ‘The IRS could never do this.’ And lo and behold, they do.”

Maag concludes that this bill may be the best Congress can currently do

“Congress is very constrained in what they can do. Spending programs are extremely difficult to expand or pass right now. Tax programs are an easier lift. In that sense, it might be the only thing they can reasonably expect to try.”

Vox’s Dylan Matthews warns that by giving “way more to poor people living in high-cost cities like New York and San Francisco than to people living in, say, Houston or Arizona,” this bill might push more people into high-cost cities. He says, “we should ask if that’s a policy goal we want to achieve.”

The Tax Foundation called this bill a “well-intentioned misfire” in 2018, writing: 

“[D]espite Senator Harris’s case that this new tax credit would lessen the burden of rent for lower-income individuals and families, such a tax credit program would distort the housing market and benefit landlords more than it would benefit renters. Furthermore, the program fails to address the reasons housing prices are so high. The tax credit program would distort decision-making for renters towards choosing more expensive properties. For example, someone who currently spends just under 30 percent of their income on rent would have an incentive to move to a more expensive apartment where rent is above 30 percent of their income to qualify for the tax credit… [T]he connection between new federal subsidies and higher prices has been shown in many other markets. For example, a Federal Reserve study found that for every dollar of federal aid for higher education, colleges raised their prices by 65 cents, meaning that students only receive 35 percent of the benefits of these subsidies. This phenomenon also appears in the case of the low-income housing tax credit (LIHTC), an existing program to encourage the construction of low-income housing through credits to both individuals and corporations. An NPR report noted that the program has led to the creation of fewer houses since 1997, while the program’s cost has risen by over 50 percent; moreover, many of the houses constructed using the LITHC would have been constructed anyway. The Congressional Budget Office found that the tax credit may allow investors and developers to capture much of the benefits, while only providing tenants with moderate assistance. Aside from these distortions that call into question the program’s effectiveness, Senator Harris’s bill would also have significant costs… Harris’s program is modeled after a proposal from the Terner Center for Housing Innovation at University of California-Berkeley. The Terner Center proposal was estimated to cost $76 billion per year. For context, making all of the individual income tax provisions of the Tax Cuts and Jobs Act permanent reduces federal revenues by $165 billion on an annual basis.”

The Tax Foundation concluded that in lieu of this bill, increasing the housing supply is the only way to make housing more affordable. It wrote, “Senator Harris’s rent relief bill would fail to address the root causes of the high cost of housing. Instead, it would wind up benefiting landlords, not significantly improving the lives of renters, and carrying a hefty price tag.”

This bill has three Democratic Senate cosponsors in the 116th Congress. Its House companion, sponsored by Rep. Danny Davis (D-IL), has six Democratic House cosponsors

In the 115th Congress, this bill had five Democratic Senate cosponsors and didn't receive a committee vote. Its House companion, sponsored by Rep. Scott Peters (D-CA), had seven Democratic House cosponsors and didn't receive a committee vote

This bill has the support of the National Low Income Housing Coalition, National Alliance to End Homelessness, Fair Housing of California, and the National Housing Law Project. 


Of NoteIn 2018, the National Low Income Housing Coalition reported that there’s a 7.2 million housing unit shortage for America’s 11.2 million extremely low-income families (who account for 25.7% of all renter households and 9.5% of all households in the country). For every 100 low-income renter households, only 37 affordable and available rental homes exist. 

The NLIHC reported that 71% of extremely low income renter households are “severely cost-burdened,” defined as spending over half their incomes on rent and utilities. Further, it found that 32% of very low income, 8% of low income and 2.3% of middle income renter households are also severely cost-burdened

Sen. Harris’ office notes that families of color are disproportionately affected by the housing affordability crisis, as immigrant families and families of color account for half of renter households. 


Media:

Summary by Lorelei Yang

(Photo Credit: iStockphoto.com / turk_stock_photographer

AKA

Rent Relief Act of 2019

Official Title

A bill to amend the Internal Revenue Code of 1986 to allow for a credit against tax for rent paid on the personal residence of the taxpayer.

    Might as well they are doing nothing to correct money hungry landlords here in Reno/Sparks area.
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    People depending on the government to survive is not good. We should be passing legislation to give the people more opportunities to jump higher in the class systems, not incentives otherwise. If you can not afford your housing, you should move as it seems fit. Be independent to better yourself, not dependent to risk losing everything about yourself.
    Like (50)
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    This is stupid, be responsible and get a place you can afford. Move to a more affordable location, like out of the city. Still don’t make enough? get another job!
    Like (31)
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    RAISE WAGES!!!!!!
    Like (27)
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    Affordable housing! Get what you can afford! It’s called a budget!!! Live within your means!!!
    Like (27)
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    Let the market decide rent. This law will see people pursue more expensive housing to qualify for the tax rates and thus drive up housing cost for every renter. Law of unintended consequences.
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    Move to a property they can affford
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    NO! AND MAY I ADD A RESOUNDING HELL NO! WTF? DON'T LIVE ABOVE YOUR MEANS! Sorry, should I just move to Fairbanks Ranch near San Diego and have others pay my rent or mortgage? Cuz that would be sweet! I can live above my means now!!! YAY! YES!🙌 We screwed the gov't AGAIN🙌! We're getting the best of them!🙌 Remember your parents telling you to pay attention in school? THIS... RIGHT HERE EXPLAINS WHY THEY/WE SAY THAT. In case you missed class what seems to be like... Oh, 1st grade to about 10th or eleventh grade cuz you thought school sucks, I'm an adult, and I'll just drop out and get my GED man, this is bullshit man. PSST! HEY DIPSHIT! Ya you... It turns out in English, which by the way is not the official language of The United States because of people like you who want everyone to be happy and just communicate with their own language which won't get them too far in our society...just like you didnt🙌 You see, those taxes we pay... Ya, those go-to different 'accounts' as you say to 'The Government'. Who you think, because you happened to miss that day, is supposed to take care of you. Ya, the same people who've also been known to buy hammmers~n~shit sometimes for $500 a piece! In Economics class, we found out THAT'S not a good thing or a positive in our lives when it comes time to balance it out. Also it also tells me there's someone on the other end who thinks like you. ..who needs help in Ethics class, we learned that stealing from others is a bad thing to do. And by thinking your 'getting over' on 'The Government', you're really getting over on yourselves, which is not the best decision😜 In Health we learned that if someone tells you they're stealing from themselves... well they may be cray-cray and need some help🤕 In Language class we learned to say it in ONE WORD! !! Think !! One day we all watched this popular movie and it had this saying... "Stupid IS as stupid does🤓" LoL! Silly people also think silly shit😂 Ya know, oddly enough its a HUGE % of you who are not the ones who did the work to live THAT life but WANT it. Of course you do... You ALSO deserve it. But you WANT freedom of choice and you have the right to be cray-cray and make bad decisions and it looks like you still do. You set this path. Live it!🤬
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    👉Absolutely not! Yet another Con from the DNC to market for ‘Pay You’ votes. That’s the persons choice for rent- Time to move-! 👉Taxpayers aren’t responsible for your rent. Harris’s plan=Pay For Votes. Zero good Policies.
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    Why do we have homeless people? One is that they cannot afford to pay rent, food, medical costs, etc. something has to go. Rent should not be one of them. Minimum wages is not enough to live on. That is why we need subsidized housing, food stamps, medical care. Why can we not help those who cannot take care of themselves? Are they suppose to just go away and die somewhere?
    Like (16)
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    Speaking from a place of need yes, my mom doesn’t have a job because she has a medical disability yet she can’t get disability payments because her case keep getting denied, due to age which is a bunch of bull. Anyways we have no income except for child support and what I make, and I am jobless right now, I believe this could help most get back on there feet.
    Like (16)
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    Any time government appropriates funds or tax credits to help pay for someone’s needs that money seems to benefit the people who sells those needs, and not the people in need. I think that affordable housing, food, medicine and medical care, education, decent jobs and so on are all issues to be dealt with- so that all of our people have the opportunity to succeed in their own way and Be able to enjoy their inalienable right to pursue happiness. The government can and should help. That help needs to constructed in a strategic and holistic way and not by many, many uncoordinated programs. I believe that a few legislative packages to address inequities in our society are a more cost effective and beneficial approach to address these issues. There are many possible ways to do this, but they need to be synergistic with long term cost-benefits and risks fully understood and addressed.
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    Slumlords will raise the rent to capitalize on the fed money
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    Yes. Raise taxes on the super wealthy to pay for it.
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    Government has nothing except that which it steals from those who actually produce. Stop stealing from productive citizens!
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    Not only no but HELL NO!!!!!
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    Only if they eliminate student debt. Otherwise, those who really need the hand up, will never see a cent. It will all go into the pockets of creditors.
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    Although I would like to support this cause, I agree that it will allow corrupt, unethical landlords to hack up prices even higher and the only people that win, are the corrupt landlords. It’s basically handing money over to Corrupt Republicans, because it enables the landlords to jack up rent fees and continue to fill those places, because the renters are recovering some fees via the tax credits. The only way to possibly address the issue, is to create thousands of non-profits that build and operate their own rental units, which flood the markets with appropriately priced rental units, single-family and multi-family and helping to drive down the cost of rentals. Once the profit margins drop below a certain range, the Corrupt Republicans will back out of the rental market, because they aren’t making enough money to continue their schemes and theft and oppression.
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    This really should only be a temporary solution. Ultimately, over the long term, we need to build more affordable housing and reign in Wall Street which has been speculating endlessly in the real estate market!
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    My first instinct was to say yes. However, after reading I.Got.an.Idea’s comment, I changed my mind. Something definitely needs to be done about rentals, though. Where I live the rents are so high all the kids are moving out. That’s sad.
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