/How Cory Booker plans to tackle housing affordability

How Cory Booker plans to tackle housing affordability

Cory Booker

Sen. Cory Booker’s plan to address affordable housing would direct $40 billion a year to the Housing Trust Fund to build and operate rental housing for people earning less than the federal poverty level or 30 percent of the area’s median income. | Kimberly White/Getty Images for MoveOn

Sen. Cory Booker (D-N.J.) says he wants to ease the cost of housing for millions of Americans who spend more than the recommended 30 percent of their income on rent.

What would the plan do?

Booker’s proposal would give renters a refundable tax credit to cover the shortfall between 30 percent of their income and rent, capped by the fair-market rent for their neighborhoods. It would also expand access to legal counsel for tenants facing eviction and includes provisions to fight homelessness and build new units for low-income renters.

How would it work?

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The refundable credit would go toward renters’ housing costs. There is no mention of an income cap for recipients, and the median participating family would receive a credit worth $4,800 a year, the campaign said.

Expanded legal rights for tenants facing eviction would be funded with a national Eviction Right to Counsel Fund, which would funnel money to state and local governments that commit to enacting a right to counsel.

Booker’s plan would direct $40 billion a year to the Housing Trust Fund to build and operate rental housing for people earning less than the federal poverty level or 30 percent of the area’s median income. It also includes funding for rural housing, grants to combat homelessness and federal funding incentives to spur local governments to overhaul restrictive zoning laws that drive up the cost of housing.

And a “Baby Bonds” plan previously proposed by Booker would help future generations with down payments by establishing a federally funded savings account with $1,000 for every American child at birth, with future government contributions determined by income. According to Booker’s staff, that plan would give 45 percent of account holders sufficient funding for a 20 percent down payment on the national median starter home.

How much would it cost?

Booker’s campaign estimates the plan would cost $134 billion a year, paid for by raising the estate tax and closing “loopholes” that benefit the wealthy.

What have other Democrats proposed?

Sen. Kamala Harris (D-Calif.) has offered a similar plan to provide tax credits to taxpayers earning less than $125,000 a year, although the value of her credit would be scaled based on income.

Sen. Elizabeth Warren (D-Mass.) has introduced legislation to invest $470 billion in two housing funds that would give states money to build or preserve affordable housing. Her bill would also dedicate funds specifically for Native American and rural housing, and it includes a boost in financing for public housing.

Who would it help?

More than 57 million people, according to Booker’s campaign, which credits researchers at Columbia University with the figure. At least 38 percent of renter households spent more than 30 percent of their income on rent in 2015, according to Pew.

Who opposes it?

There’s some debate among policy wonks and housing activists over the best way to ease the affordability crunch, since subsidies would likely drive up the cost of rent in some areas. Increasing the supply of housing stock, meanwhile, would lower prices. Booker’s plan takes both approaches: The provision directing federal funds to the Housing Trust Fund for the construction of new rental units is a new addition to the renter tax credit legislation he proposed last year.

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