HUD Fair Market Rents<\/a> are defined based on home size and location \u2014 there is nothing inherent to the FMR system or the legislation itself that requires that a single individual be limited to a studio apartment, for instance.\u00a0 What college student, with an income limited to summer job earnings, wouldn\u2019t want a two-bedroom apartment, all the better to throw parties in?\u00a0 And there appears to be no restriction on the cost of utilities \u2014 why not take long showers, heat and cool the apartment comfortably, and leave the lights on even when you\u2019re not home, all the better to deter thieves?<\/p>\nThe legislation doesn\u2019t establish how the amount of rent would be determined.\u00a0 Is each lessee on a lease assumed to pay equal proportions?\u00a0 What about residents not on the lease?\u00a0 Seems like it would be pretty easy for one roommate to claim the full responsibility for paying the rent, while the other covers cable and internet, to maximize the subsidies.\u00a0 Among married couples, the stay-at-home mom with an income of $0 might claim to be the leaseholder and file for free rent.<\/p>\n
How would the amount of rent be documented?\u00a0 If the taxpayer just asserted the rent amount, it would be easy, and very tempting, to claim high costs.\u00a0 If the law required proof, it would burden landlords.\u00a0 But on the other hand, those same landlords might strike kickback deals with tenants, providing rebates to qualified renters.<\/p>\n
And the money is refundable at the end of the year, not payable in increments over the year.\u00a0 For middle-class folk, that\u2019s easily-enough dealt\u00a0with, by adjusting the W4, or by treating this as a bonus for the following year.\u00a0 For poor and working class families, there will surely be workarounds, but more likely in the form of high-interest loans with the tax refund as collateral, moving more of the benefit into the hands of third parties.<\/p>\n
And the law, again, specifies individuals.\u00a0 If in practice, the IRS uses household income, this would be a very harsh barrier to marriage, with substantial amounts of lost cash for adding more income to the \u201chousehold.\u201d<\/p>\n
The same bidding-up process would happen at the higher income levels, although one\u2019s willingness to pay more is somewhat moderated when the cost is reduced by a quarter or a half as it is when one pays no additional cost for it at all.\u00a0 And woe to the renter whose income increases to $25,001, $50,001, $75,001, or $100,001 \u2014 and who doesn\u2019t find a way to get that excess paid in cash.<\/p>\n
It\u2019s a mess.<\/p>\n
Does Harris know it\u2019s a mess?<\/p>\n
Does Harris figure the details will get ironed out later, or that the details are irrelevant because what matters is putting forth legislation to demonstrate to constituents and supporters that this is an issue regarding which, were Democrats in charge, she would take the lead on improving the living circumstances of those who are struggling financially?<\/p>\n
More than anything else, this is what troubles me \u2014 the idea that legislation can and should be symbolic (yes, the GOP did it too, repeatedly passing no-hope \u201cObamacare repeal\u201d bills) with much less interest in the practical impact than in the message it sends.\u00a0 If having the right intentions are all that matter, and taking actions that signal having those good intentions, regardless of the actual outcome, that\u2019s a worry.\u00a0 It is certainly true that Harris\u2019s bill will never see passage.\u00a0 But consider that back a year ago, the GOP missed the opportunity to do some real good in mending Obamacare, because of disputes among Republicans about whether real proposals on the table went far enough or were only half-measures.\u00a0 If Harris and her fellow supporters of direct government payments convince enough of the population that this is a sacrifice-free way forward, this will make it all the harder for Republicans and Democrats to produce real, meaningful solutions \u2014 in this case, the expansion of housing supply that is still blocked by NIMBYs in high-cost housing areas.<\/p>\n
\u00a0<\/p>\n
Image:\u00a0 apartment buildings, from http:\/\/www.geograph.org.uk\/photo\/1106601<\/p>\n<\/body><\/html>\n","protected":false},"excerpt":{"rendered":"
In mid-July, Senator Kamala Harris of California introduced the \u201cRent Relief Act\u201d and was immediately ridiculed by countless skeptics who observed that her proposed solution to increasing rents would inevitably send more money to landlords by means of increasing rent costs, for instance, at \u201cForbes:\u00a0Democrats Proposed Rent Subsidy Would Enrich Landlords And Fleece Taxpayers.\u201d\u00a0 Quite […]<\/p>\n","protected":false},"author":2209,"featured_media":10423,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[397,1033],"class_list":["post-10393","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized","tag-affordable-housing","tag-good-intentions"],"yoast_head":"\n
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<\/p>\n