Bill Overview
Title: Rent Relief Act of 2022
Description: This bill allows a refundable tax credit through 2024 for individuals who pay rent for a principal residence that exceeds 30% of their gross income for the taxable year. The amount of the credit ranges from 25% to 100% of the excess rent, depending on the gross income of the taxpayer. The credit is not available for taxpayers with gross income that exceeds $100,000 ($125,000 for a taxpayer whose principal residence is located in a high-cost area, as defined by the bill). Rent that exceeds 100% of the small area fair market rent (including the utility allowance) for the residence may not be taken into account for the purpose of determining the amount of the credit. For individuals who reside in government-subsidized housing, the bill allows a credit equal to 1/12th of the rent paid by the taxpayer (and not subsidized under the program) during the year with respect to the residence. The Department of the Treasury must establish a program for making advance payments of the credit on a monthly basis.
Sponsors: Sen. Warnock, Raphael G. [D-GA]
Target Audience
Population: people who pay more than 30% of their gross income on rent for their principal residence.
Estimated Size: 20800000
- The bill targets individuals who pay more than 30% of their gross income on rent, therefore, applies broadly to low-to-middle-income renters.
- This includes those who live in government-subsidized housing, where the credit is reduced to account for the subsidy.
- Renters with incomes above $100,000, or $125,000 in high-cost areas, are not eligible, focusing the bill on lower-income and some middle-income individuals.
- Individuals benefiting from the bill span a wide demographic, including working adults, low-income families, elderly renters, and possibly students among others.
Reasoning
- The Rent Relief Act is designed to target low-to-middle-income individuals who are significantly burdened by rental costs, and it takes into account various factors such as income limits and fair market rent restrictions.
- To create a realistic simulation of interviews, we need to include a variety of people from different demographics who are likely to benefit from the policy as well as those who may not be eligible due to higher incomes or other reasons.
- While the policy is primarily aimed at renters paying more than 30% of their income on rent, there's variation in the potential impact depending on the specific characteristics of individuals, such as living in high-cost areas or receiving partial government-subsidy housing.
- Not all renters who pay above 30% of their income on rent may benefit equally due to the potential cap based on the fair market rent, and this complexity should be reflected in the simulated scores.
- The budget constraints imply that while several million people could benefit, the overall amount of relief might be spread thin across vast populations, enabling us to foresee varying degrees of relief impact—from substantial relief to minimal or even negligible effect within the eligibility pool.
Simulated Interviews
marketing coordinator (New York City, NY)
Age: 28 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 15/20
Statement of Opinion:
- This policy could significantly reduce my financial stress and allow me to save for emergencies.
- Living in New York is expensive, and every bit of help counts.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
software engineer (Austin, TX)
Age: 34 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 1.0 years
Commonness: 12/20
Statement of Opinion:
- This policy probably won't apply to me since I'm nearing the income limit.
- If I get any benefit, it will help with unexpected expenses.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
teacher (Cleveland, OH)
Age: 42 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 5.0 years
Commonness: 14/20
Statement of Opinion:
- This relief will make a difference in my monthly budget, allowing more funds for my children's needs.
- It gives breathing space in managing daily expenses.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 7 | 4 |
| Year 5 | 7 | 4 |
| Year 10 | 6 | 4 |
| Year 20 | 6 | 4 |
freelancer (Portland, OR)
Age: 30 | Gender: other
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 17/20
Statement of Opinion:
- This could stabilize my monthly expenses when my income fluctuates.
- It provides needed consistency in planning finances.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
retired (Phoenix, AZ)
Age: 55 | Gender: male
Wellbeing Before Policy: 3
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- Retired and fixed income, this relief means I can better manage healthcare costs.
- It's beneficial for retirees facing high living expenses.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 3 |
| Year 2 | 6 | 3 |
| Year 3 | 6 | 3 |
| Year 5 | 6 | 3 |
| Year 10 | 6 | 3 |
| Year 20 | 5 | 3 |
part-time retail worker (Norfolk, VA)
Age: 68 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 5.0 years
Commonness: 9/20
Statement of Opinion:
- The partial credit helps with small but essential expenses like prescription costs.
- Even a small amount makes a difference on my budget.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 5 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 6 | 4 |
| Year 10 | 5 | 4 |
| Year 20 | 4 | 4 |
construction worker (Miami, FL)
Age: 39 | Gender: male
Wellbeing Before Policy: 3
Duration of Impact: 3.0 years
Commonness: 13/20
Statement of Opinion:
- Eases the stress of constant rent payment struggles.
- Might finally allow for some savings or emergency funds.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 3 |
| Year 2 | 6 | 3 |
| Year 3 | 6 | 3 |
| Year 5 | 5 | 3 |
| Year 10 | 4 | 3 |
| Year 20 | 4 | 3 |
graduate student (Seattle, WA)
Age: 25 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 2.0 years
Commonness: 11/20
Statement of Opinion:
- Could allow me to focus more on my studies rather than juggling jobs to pay rent.
- Reduces my financial worries heavily.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 5 | 4 |
| Year 5 | 4 | 4 |
| Year 10 | 3 | 4 |
| Year 20 | 3 | 3 |
unemployed (Detroit, MI)
Age: 50 | Gender: female
Wellbeing Before Policy: 2
Duration of Impact: 1.0 years
Commonness: 7/20
Statement of Opinion:
- The relief can avert the threat of eviction in the short term.
- Offers temporary respite while searching for employment.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 2 |
| Year 2 | 4 | 2 |
| Year 3 | 3 | 2 |
| Year 5 | 2 | 2 |
| Year 10 | 2 | 2 |
| Year 20 | 1 | 1 |
self-employed (Boise, ID)
Age: 60 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 2.0 years
Commonness: 8/20
Statement of Opinion:
- Some financial relief would assist in maintaining both personal and business expenses.
- Not significant but still helpful in managing cash flow.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Cost Estimates
Year 1: $22400000000 (Low: $17500000000, High: $27500000000)
Year 2: $22400000000 (Low: $17500000000, High: $27500000000)
Year 3: $0 (Low: $0, High: $0)
Year 5: $0 (Low: $0, High: $0)
Year 10: $0 (Low: $0, High: $0)
Year 100: $0 (Low: $0, High: $0)
Key Considerations
- The provision of advance payments requires robust implementation by the Treasury to avoid delays or inaccuracies in payment.
- Limitation of the credit to rents not exceeding small area fair market rent may complicate qualification and require careful management.