WASHINGTON, D.C. —U.S. House Majority Whip James E. Clyburn (D-SC) and U.S. Senator Cory Booker (D-NJ) today reintroduced legislation that takes an innovative, two-pronged approach to tackling the affordable housing crisis. The Housing, Opportunity, Mobility, and Equity (HOME) Act would provide immediate assistance to rent-burdened individuals with monthly tax credits, while pushing communities to adopt more inclusive zoning laws by making their surface transportation funding and community development block grants contingent on such zoning policies. The bill is supported by the National Low Income Housing Coalition, the National Housing Law Project, and the Housing Assistance Council.
Exclusionary zoning laws, for example, local ordinances that ban apartment buildings from certain residential areas or set a minimum lot size for a single-family home, can often exclude some families and individuals from certain neighborhoods, leading to a shortage of affordable housing for those who need it. Nationwide, there are only 37 affordable and available units for every 100 extremely low-income households, and nationally, the U.S. faces a shortfall of more than 7 million affordable units.
Due in part to this limited supply, rents have increased, but the ability of families to pay their rent has not. On average, to rent a two-bedroom apartment, you would need to earn $22.10 per hour full-time, which is almost three times the minimum wage. Because renters often devote the largest portion of their income to rent, high housing costs make it difficult for families to save and invest in their future. The HOME Act would provide monthly tax credits to rent-burdened individuals to cover the difference between 30 percent of their income and the lesser of their monthly rent or the small area fair market rent of their area.
“We’re in the midst of a national housing crisis in this country in which millions of Americans cannot afford a roof over their heads,” Booker said. “There isn’t a county in America where you can make minimum wage and afford a two-bedroom apartment. This legislation confronts the affordable housing crisis by addressing both the lack of units – the supply side – and the fact that incomes have not risen to keep up with housing costs – the demand side. Families need help now, but in the long run, we need to build more.
“This is personal for me,” Booker added. “Housing impacts where you go to school, what grocery stores or bodegas you buy food from, and what parks you can play at, among many other things. It is a foundational rung in the ladder of economic opportunity and we have to ensure all kids and families have equal access to clean, safe, neighborhoods.”
Congressman Clyburn represents the city of North Charleston, which has the highest eviction rate of any large city in the country. Nearly half of the small cities and rural areas with the highest eviction rates in America are in South Carolina. An Eviction Lab study found South Carolina evicts families at a rate four times higher than the national average.
“The need for affordable housing solutions is an epidemic in my state,” Clyburn said. “The growing gap between wages and housing costs is a crisis that must be addressed. The HOME Act offers bold solutions to immediately ensure that cost-burdened families can afford their rent while taking steps to bring down rent for everyone.”
In 1969, Booker’s parents faced what was known as “real estate steering” – in which black couples were steered away from certain neighborhoods – when they tried to buy a home in an affluent suburb of New Jersey. Only after enlisting the local Fair Housing Council, which helped setup an elaborate sting operation, were they able to purchase a home in Harrington Park, New Jersey.
Addressing Restrictive Zoning Rules:
Under the HOME Act, states that receive Surface Transportation Block Grants or Community Development Block Grants (CDBG) must create an inclusive zoning strategy. This entails demonstrating a strategy to support new policies, programs, or regulatory initiatives to create a more affordable elastic, and diverse housing supply. This strategy could take a variety of forms, allowing the locality to choose the best way to address their affordable housing challenges.
For example, a grantee could choose to reduce restrictions on lot size, eliminate parking requirements, or allow accessory dwelling units and multifamily homes. These actions would allow for the construction of greater housing density in expensive cities, thus increasing housing supply and lowering prices. Municipalities could also institute a “density bonus,” which allows developers to build more units if a portion of them are maintained as affordable housing units.
Helping Rent-Burdened Working Families Now
The HOME Act would provide a refundable renters’ credit, administered through the tax code, to offer significant relief for those paying a high percentage of their income to rent. Anyone paying more than 30 percent of their before-tax income on rent would be eligible (30 percent of income is the HUD standard of “rent burdened”). The credit would cover the difference between 30 percent of an individual’s income and the small area fair market rent (SAFMR) of their area, or actual rent paid, whichever was less. More than 13 million families would be eligible.