California Senator Kamala Harris, who has been talked about as a Democratic candidate for president, has introduced legislation to provide refundable tax credits to benefit 13.3 million rent-burdened families. ‘Refundable’ means they would receive cash, even if they owed no taxes.

In many urban areas – including in Senator Harris’s home state of California and especially in places with booming economies, such as the Silicon Valley – the lack of affordable housing constitutes a crisis. The Department of Housing and Urban Development defines affordability as “the extent to which enough rental housing units of different costs can provide each renter household with a unit it can afford (based on the 30-percent-of-income standard).” The National Low Income Housing Coalition, which accepts this standard, has documented a significant national gap between wages and rents.

“A full-time worker earning the federal minimum wage of $7.25 needs to work approximately 122 hours per week for all 52 weeks of the year, or approximately three full-time jobs, to afford a two-bedroom rental home at the national average fair market rent. The same worker needs to work 99 hours per week for all 52 weeks of the year, or approximately two and a half full-time jobs, to afford a one-bedroom home at the national average fair market rent.”

The Rent Relief Act would provide tax credits for renters across the country with limited incomes who pay more than 30% of their incomes for rent and utilities. Below $25,000, the subsidy would be 100% of the cost of rent that exceeds 30% of income. In very expensive areas, the income ceiling would be $124,999, which would yield a 25% subsidy of the excess. (That’s not a lot of spending power for a family of four in some cities.)

This proposal certainly represents a bracing expansion of federal policy related to renters (though the tax code is strewn with ample benefits for homeowners). Irony watch: while this is more grist for the mill in talk of the Democratic Party’s move to the left, and chatter about democratic socialism, especially since the election of Alexandria Ocasio-Cortez – the Rent Relief Act is actually a revision of a proposal introduced by Representative Joe Crowley, the old guard Democrat whom Occasio-Cortez defeated.

It’s easy to find fault with this approach to high rents based on the principle of supply and demand: if there is a shortage of affordable houses and apartments, then the obvious solution is to build more. As the supply goes up, prices will come down. Instead, in cities with the most expensive rental rates, restrictive zoning laws, minimal parking requirements, and opposition by residents to denser housing in their neighborhoods (and in the neighborhoods through which they commute each day), ensure that the supply of affordable housing is severely restricted where it is most needed (including in prosperous cities in blue states, such as California). So local regulations and neighborhood opposition quashes the development of new housing.

The virtue of Harris’s proposal is that it is straightforward in concept: rents are too high for wage earners, so give them money to pay the rent. Whether refunding taxes or providing subsidies, the federal government is capable of dispensing money.

The most successful anti-poverty program in history is Social Security. As complicated as the rules are, it’s simple in concept, and that’s one reason for its success. Folks need not be well-versed in Social Security rules to understand that they (and their employers) support the program with taxes, and when they retire, they draw monthly benefits.

In my view, Living Wage Ordinances (locally) or expanded Earned Income Tax Credits (nationally) would make more sense. Why line the pockets of landlords with rental subsidies? With increased EITC funding, the government could provide additional income – unrestricted – so folks could decide how to spend the money: food, clothes, education, transportation – whatever – not just housing.

Of course conservatives will object to creation of another ‘entitlement.’ Where will the money come from? Kevin Drum has an idea – or rather eleven (each with a footnote) – on places to adjust the budget to come up with the cash.

It’s all a matter of priorities. Do we help low-wage workers struggling to pay the rent, or do we dish out more tax reductions to the rich?

Photo: Senator Harris on Twitter.