Come election time, you can typically expect at least some chicken in nearly every constituent’s pot. If you’re a politician, that’s the way you get votes.
And so, as Gov. Cuomo simultaneously attacks a property tax burden that weighs heavily on homeowners throughout the rest of the state, he has devised a renter tax credit that would deliver some assistance to the state’s renters, most of whom are New York City residents.
It’s set to cost the state $200 million the first year and $400 million in future years — spreading around rent relief to a vast number of tenants. Many state and local elected officials may be asking, “What’s not to like?”
Here are some of the answers — all of which are rooted in the scattershot nature of the governor’s plan.
The proposed tax credit, targeted to households with adjusted federal incomes up to $100,000, is an arbitrary approach to rent relief that is unrelated to need.
Yes, there’s an income cap — but it’s so high that the help provided to individual renters winds up being minuscule.
For example, we estimate the tax credit will reach 1.3 million of New York City’s 2.1 million tenant households — delivering an average benefit of only about $89 a recipient in the first year (and double that in the second year).
That’s simply too paltry to make a dent in the soaring rent burdens of low-income tenants. In contrast, a 2008 Assembly “circuit breaker” bill that was more closely targeted to need would have provided benefits averaging $271 a recipient to 1.1 million truly overburdened city renters.
And the assistance is terribly unfocused. In New York City, recipients would include 182,000 renters in the private market with incomes between $72,000 and $100,000. As a group, their median rent burden is 20% of their incomes (well within the 30% federal affordability standard).
What sense does that make?
The lucky winners will also include 317,000 renters living in government-assisted housing, most of whom are guaranteed affordable rents under the law. Why?
In total, 38% of recipients of the proposed tax credit — 499,000 out of 1.3 million — are not carrying excessive rent burdens.
Yet oddly, the tax credit explicitly excludes 101,000 low-income tenants in private apartments, simply because they are living alone and are not elderly. As a group, they carry an extremely high median rent burden of 56%.
Their exclusion is patently unreasonable and unfair.
Many overburdened renters across New York State could be helped with significant rent relief through a more income-targeted tax benefit.
The state should go back to the drawing board and develop an approach that effectively addresses the rent affordability crisis faced by low-income New Yorkers.
Otherwise, the equivalent amount of taxpayer dollars could be invested in a voucher program that helps homeless families leave city shelters, or in a subsidy program that increases the number of affordable housing units set aside for low-income households in new residential developments.
Between 2002 and 2011, New York City lost nearly 40% of the total number of apartments affordable to low-income families, defined as those with incomes at or below 200% of the federal poverty threshold, according to my organization’s analysis of census data on the city’s housing stock.
Rent burdens now account for a staggering two-thirds of income, on average, for poor New Yorkers in unsubsidized units. After paying the rent, these people have precious few dollars for food, transportation, medical care, educational costs and other necessities.
The governor and our Albany legislators need to be less concerned about greasing the palms of every last voter and more intent on ensuring that scarce dollars are put to the best use in alleviating the rent affordability crisis.
Bach is the senior housing policy analyst for the Community Service Society of New York.
