On Monday at the Woodside Houses, Congressman Joseph Crowley introduced the Rent Relief Act, a bill that would provide two refundable tax credits for residents who rent their apartments or homes and pay more than 30 percent of their income for rent.
The tax credit would take into account an individual or couple’s annual income, total amount spent annually on rent, and a “stimulated rate of the federal government’s established fair market annual rent caps.” The credit caps for people who make more than $125,000 a year.
The legislation would also benefit residents living in government-subsidized housing, which normally caps rent at 30 percent of a person’s income. The bill would allow public housing residents, Section 8 voucher recipients or Section 202 seniors to claim the value of one month’s rent as a refundable tax credit.
“That means more money in renters’ pockets to help alleviate the financial squeeze so many people face daily here in New York City,” Crowley said. “It’s real money and I want it back in the hands of hardworking New Yorkers.”
According to the congressman, nearly two-thirds of all households in New York City are occupied by renters. Nationally, 111 million Americans live in rental housing.
More than half of all city residents who are renting pay more than 30 percent of their income for rent, which experts call “rent-burdened.” A quarter of renters pay more than half of their income on rent.
While rents continue to skyrocket, wages have remained relatively stagnant. Meanwhile, the demand for affordable rental housing is outpacing supply, Crowley said.
“The lack of rental affordability isn’t just hurting the working poor, it’s a serious burden on hardworking middle-class families as well,” he said.
Under the proposed Rent Relief Act, a married couple making $80,000 and paying $2,500 a month in rent spends 37.5 percent of their income on housing. In this scenario, the family would receive a tax credit valued at $1,367.
In another scenario, a single parent of two kids making $24,000 a year and paying $900 a month in rent spends 45 percent of their income on rent. Because this family lives in housing below the federal government’s fair market cap, their tax credit would be $3,600.
Local elected officials threw their support behind Crowley’s proposal. Councilman Jimmy Van Bramer, who grew up in a rental building, said the tax credit would help working and retired people in the community.
“Every single dollar counts,” he said.
Rachel Fee, executive director of the statewide policy and advocacy organization New York Housing Conference, said since 1990 there has been a 51 percent increase in median rent and a 1 percent increase in median household income.
The proposed bill would help nearly 1 million rent-burdened households in New York State, she said.
“This legislation will help working families who are turning over too much of their paychecks each month,” Fee said, “compromising their ability to meet the needs of their families.”
Bishop Mitchell Taylor, CEO of Urban Upbound, said it will greatly benefit the 500,000 residents of public housing.
“Everyday, they face the challenge of increasing rent and trying to figure out whether they’re going to pay the rent or buy medication,” he said. “Even in a subsidized development, people are struggling to make ends meet.”