January 24, 2013
The Center has issued a thought-provoking report, Renters’ Tax Credit Would Promote Equity and Advance Balanced Housing Policy. The summary states that
Over the past several decades, the nation’s housing policy has focused predominantly on increasing homeownership. Most federal housing expenditures now benefit families with relatively little need for assistance. About 75 percent of federal housing expenditures support homeownership, when both direct spending and tax subsidies are counted. The bulk of homeownership expenditures go to the top fifth of households by income, who typically could afford to purchase a home without subsidies. Overall, more than half of federal spending on housing benefits households with incomes above $100,000.
The report makes the obvious but politically delicate point that federal housing policy should assist low-income households as opposed to upper income households. The report proposes a well thought out renter’s tax credit that could complement existing programs like the Low Income Housing Tax Credit.
Whether a renter’s tax credit (budgeted at $5 billion in the report) is politically feasible at this time is another question entirely.| Permalink