Bill Doubles Tax Credit, Which Hasn’t Changed Since 1979
Livermore, CA – State Sen. Steve Glazer (D-Orinda) introduced legislation that will help financially strapped California renters get some relief from rising housing prices by doubling the size of the state’s renter’s tax credit.
The bill, SB 1182, would increase the credit to $120 for renters filing their taxes as individuals and $240 for joint filers. It would be the first increase in the credit since 1979.
The credit goes to individuals with adjusted gross incomes of $40,078 or less and to joint filers with incomes of $80,156 or less.
“This increase is long overdue,” Glazer said. “The last time renters got a break, Jimmy Carter was president and Jerry Brown was 41 years old. Rents have skyrocketed since then but the renter’s tax credit has remained frozen in time.”
SB 1182 is co-authored by Senators Jim Beall, D-San Jose; Steve Bradford, D-Gardena: Bill Dodd, D-Napa; Cathleen Galgiani, D-Stockton; Jerry Hill, D-San Mateo; Ben Hueso, D-San Diego; Connie Leyva, D-Chino; Josh Newman, D-Fullerton; Janet Nguyen, R-Fountain Valley; Richard Pan, D-Sacramento; Anthony Portantino, D-Glendale; Richard Roth, D-Riverside; Nancy Skinner, D-Berkeley; Bob Wieckowski, D-Fremont; Scott Wilk, R-Santa Clarita; and Assemblymember Tom Lackey, R-Palmdale.
Glazer noted that last year, the Legislature passed a number of bills aimed at making housing more affordable, including an affordable housing construction bond measure, a new real estate transaction fee to finance low-cost housing, and laws allowing local governments to fast-track approval of some affordable housing projects.
Those steps will likely help to slow the growth in housing costs, but Glazer said the benefit to renters will have to trickle down over many years as more housing is proposed and eventually built.
“None of those measures directed relief to the monthly budgets of struggling renters,” he said. “The renter’s tax credit does.”
California rents have tripled since 1979, squeezing family budgets. According to a June 2016 report by Apartment List, the median rent now exceeds $2,100 for a two-bedroom apartment unit. In San Francisco, the median rent for a two-bedroom apartment was $4,550. The high price of housing is a key contributor to the state’s troubling poverty rate, with the Public Policy Institute of California estimates includes 21% of all Californians when factoring in housing and other cost-of-living expenses.
The increase in the renter’s tax credit would cost the state general fund an estimated $230 million a year. In comparison, the home mortgage interest deduction cost more than $4 billion in 2017.
“This is simple fairness,” Glazer said.