More and more 2020 presidential candidate hopefuls are sponsoring anti-poverty and economic development bills that offer a glimpse into their policy positions. Many affordable housing advocates have already buzzed about how the 2020 primary presents an opportunity to put housing at the forefront of policy debates, and a few of these proposed bills add fuel to that fire.
A team of researchers recently analyzed five of these bills – from Sens. Cory Booker, Kamala Harris, Sherrod Brown, and Rep. Michael Bennet – in an article for Vox. The researchers found that each bill would lift millions out of poverty – the main difference being the means for doing so.
“Two [bills] would expand the earned income tax credit (EITC), another two offer assistance for rent, and one is a child allowance ,” the article explains. The two that offer rental assistance are the Rental Relief Act (RRA) from Sen. Kamala Harris and the HOME (Housing, Opportunity, Mobility, and Equity) Act from Sen. Cory Booker. The researchers ultimately found that those two bills would be the most effective of the bunch.
These rental assistance bills come at a time when housing costs continue to outpace wages – by a lot. The housing wage for the whole country is $22.10, and in Vermont it’s $22.40. That’s an $11.90 gap between Vermont’s minimum wage and the housing wage. There is not a single state in the whole country where a worker earning minimum wage could afford a two-bedroom apartment.
The RRA Act and the HOME Act try to address the so-called “housing wage gap” by focusing on refunding the renter the difference between their rent and 30% of their income. From Vox:
The Rent Relief Act ($93 billion a year), also by Harris, would offer a refundable tax credit to people making $100,000 or less and spending at least 30 percent of their income on rent. The credit would be worth a certain percentage of the difference between their rent (capped at 150 percent of area fair market rent) and 30 percent of their income. For the poorest renters, the credit would cover the full difference; for slightly less poor renters, 75 percent, and so on.
The HOME (Housing, Opportunity, Mobility, and Equity) Act ($134 billion a year) by Booker would, like the Harris bill, provide a refundable credit to people paying more than 30 percent of their income in rent. The credit would be worth the difference between their annual rent (capped at the area fair-market rent) and 30 percent of their income. Unlike the Harris bill, there’s no strict income requirement, though the fair market rent requirement prevents the credit from going to renters of luxury homes.
It’s interesting to put these two pieces of legislation in conversation with what we know about rental assistance and evictions in Vermont. A recent evictions study from Vermont Legal Aid – the first of its kind – found that up to 70% of evictions in Vermont are due to unpaid rent. Research from Matthew Desmond of the Eviction Lab found that over a third of families are evicted for less than a month’s rent. Additionally, In nearly three-quarters of the cases VLA examined, the landlord had a lawyer but the tenant did not. This discrepancy was part of the reason that three-quarters of households that had an eviction filed against them were evicted.
Further, the VLA report suggests that $800,000 strategically invested in back rent support would likely reduce the amount of evictions due to lack of payment by up to 50%. By bridging the gap between income and rent, policies like the RRA Act and the HOME Act – and the back payment option VLA suggests – serve both to alleviate poverty and prevent evictions. It’s worth reiterating here that among the anti-poverty legislation 2020 contenders have already proposed, rental assistance measures are the most effective at raising the most people out of poverty.
That’s huge. As a growing number of studies find that home stability is one of the most important social determinants of health for young children and families, it’s important that we pursue policies that allow families to stay put in their homes, grow roots in their communities, and have stable lives.
The affordable housing crisis is complicated and needs to be solved on multiple fronts at multiple levels of government. The National Low-Income Housing Coalition (NLIHC) notes that even the RRA Act and the HOME Act, which would lift around two million people out of poverty, would still need supply-side solutions to accompany it since it would likely increase demand for housing.
Regardless of who wins the Democratic nomination or the presidency, one thing is clear: our leaders – at the national, state, and local level – need to work together to solve the problem of high housing costs. If we are truly committed to equity, we will make sure that affordable homes and resources are available to everyone.
“Eviction in Vermont: A Closer Look.” Vermont Legal Aid.
The Eviction Lab. Princeton University.
“Out of Reach: Vermont.” National Low Income Housing Coalition.