SACRAMENTO â California renters who have been drowning in unaffordable housing costs would see much-needed relief under a bill unveiled Wednesday by State Senator Steve Glazer (D-Contra Costa), Assembly members Sharon Quirk-Silva (D-Orange County), Lorena Gonzalez (D-San Diego), and 28 co-authors.
The legislation, SB 248, would increase Californiaâs renterâs credit for the first time in 40 years and would represent significant help to single parents in particular.
âHousing costs are going through the roof in California and families are struggling to pay the rent,â Glazer said. âForty years have passed since the last time the renterâs credit was increased, so itâs about time we provide this needed financial relief to renters.â
âIt is no secret that our state is facing a homelessness epidemic, and a housing shortage,â said Assemblywoman Quirk-Silva (D â Orange County), a principal co-author. âHard working families are ending up on our streets because they cannot afford to pay the exorbitant cost of rent in our state. Students in Orange County, in particular, are commuting more than an hour, because their rent is too high. We must do more, and this bill is the solution.â
Those eligible for the new renterâs credit would be single filers making $41,641 or less and joint filers making $83,282 or less. Eligible households with children would receive a $434 refundable credit; households without children would receive $220. Currently, eligible renters have their tax liabilities offset by $60 for single filers or $120 for joint filers.
The renterâs credit has not seen an increase since 1979. The proposed increase accounts for inflation since then.
In 2017-18, the Legislature passed a package aimed at increasing the stateâs housing supply, including putting a bond measure on the ballot and another to make it easier for developers to build affordable housing.
Assemblywoman Gonzalez, a principal co-author, said: âNearly half the stateâs residents are renters, but they have been largely ignored in our tax policies,â âWhile California homeowners receive more than $4 billion in tax relief through mortgage deductions, rentersâ relief has been barely a blip on the radar. This can serve as one tool to make renting more affordable and provide relief for working families.â
But, while these measures might help slow the growth of housing prices, this bill can do more to provide direct help to renters â those who typically struggle the most to find affordable housing.
Vignesh Iyer, Student Basic Needs Officer for the University of California Student Association, said that students are among the many Californians facing high housing costs today, âone of many obstacles they face in affording and attaining their degrees. This legislation will be an important step in addressing our costs of living and will contribute to all studentsâ overall educational success.â
The Renterâs Tax Credit is a common-sense idea that offers urgently needed relief to Californiaâs millions of rent-burdened families, said Brian Hanlon, President of California Yes In My Back Yard (YIMBY).
âBut itâs also a matter of fairness,â Hanlon said. âFor decades, housing policy has unfairly favored homeowners by offering them a tax credit for the interest on their mortgages, but renters havenât been granted similar benefits. California YIMBY is proud to support this important piece of legislation and make our housing policy more fair and equitable.â
SB 248 would make the tax credit fully refundable so that renters who have no tax obligation could receive the maximum refund. This bill would index the credit in perpetuity to account for inflation as calculated by the Franchise Tax Board. Under the legislation, the Governor could suspend the increase during an economic emergency.
The renterâs credit was established in 1972. Since its only increase in 1979, rents in California have nearly tripled. Median state rent exceeds $1,800 a month for a two-bedroom apartment, and rentals in cities like San Francisco average more than $3,000 a month.
