Investment in Renters Credit Would Help 13,800 Low-Income NJ Families and Re-balance Housing Policy
A new “project-based” renters tax credit could help a substantial number of the lowest-income renters — including low-wage workers, poor seniors, and people with disabilities — afford decent, stable housing.
Fully phased-in, the renters credit would help 720,000 extremely low-income families afford housing, including 13,800 New Jersey families.
On March 9, 2017, the Center on Budget and Policy Priorities (CBPP) released a new report about a proposal for a state-administered renters’ credit to help the lowest-income families afford housing.
Monarch Housing Associates encourage Congress to include the renters credit in tax legislation. Instituting a renters credit would help re-balance federal housing policy and address the unmet need for housing assistance among low-income households in New Jersey and across the country.
New Jersey’s share of a fully phased-in $6 billion renters credit would be $162.7 million. In New Jersey, there were 241,300 severely cost-burdened households eligible for the credit between 2011-2015.
Key points include:
- New Jersey could use the credit to end or sharply reduce homelessness among veterans or other groups, enable low-income elderly people or people with disabilities to live independently in their communities and provide stable homes near good schools for low-income families with children.
- Currently, fewer than one in four eligible low-income renters receives housing assistance and tight budget caps will make it difficult to expand those programs in the coming years.
- More than 11 million renter households, most with incomes below the poverty line, pay more than half their income for housing. These families often must shift resources from basic needs like food or clothing to pay rent, and are more likely than other families to experience eviction and even homelessness — problems that can adversely affect children’s development and adults’ ability to find and keep a job.
- A renters’ credit would help poor families afford a home by providing states with credits that they would allocate to rental housing owners and developers for use in particular developments. Families living in renters’ credit units would pay no more than the accepted federal standard of affordability for rent and utilities— and the rental unit’s owner would receive a federal tax credit in return for reducing the rent to that level.
- A renter’s credit would help address an imbalance in current federal housing expenditures, which overwhelmingly benefit high-income homeowners over low-income renters who have the greatest needs.
The CBPP paper draws on the proposal published in 2013 but focuses on a solely project-based credit.