BEYOND THE NUMBERS
Putting Housing Money Where the Need Is
“If someone said, ‘Let’s have a voucher program on the spending side, giving high-income families vouchers to subsidize their mortgages,’ ” said Glenn Hubbard, the dean of Columbia Business School and a prominent Republican economist, referring to the home mortgage interest deduction, “I don’t think that would get through Congress.”That’s why we’ve called for rebalancing federal housing policy by creating a renters’ tax credit to help low-income families afford housing. Policymakers have focused for decades on policies to increase homeownership, and most federal housing dollars benefit families with relatively little need for assistance. More than half of federal dollars for housing benefit households with incomes above $100,000 (see chart). Meanwhile, the nation’s lowest-income renters are far likelier to struggle to pay for housing — and their affordability problems are growing. A renters’ credit, administered by states and capped at $5 billion a year, could:
- Assist about 1.2 million of the lowest-income renter households;
- Reduce each household’s rent by an average of $400; and
- Lift 250,000 families out of poverty and lift four of five of the poorest families it assists out of deep poverty (defined as having income below half of the federal poverty guidelines).