IDEAS home Printed from https://ideas.repec.org/a/cog/urbpla/v9y2024a8526.html
   My bibliography  Save this article

Earned Income Tax Credit Plus: A New Way to House the Working Poor

Author

Listed:
  • Peter Dreier

    (Urban & Environmental Policy Department, Occidental College, USA)

  • Seva Rodnyansky

    (Urban & Environmental Policy Department, Occidental College, USA)

Abstract

The housing affordability crisis is one of the defining features of the US today. The demand for housing subsidies outstrips supply by a factor of at least 4 to 1. Moreover, housing affordability varies greatly between and within metropolitan areas. This article proposes a new federal policy—the Earned Income Tax Credit (EITC) Plus—to decrease housing cost burdens for working households by combining aspects of two major federal programs, the EITC, a tax-based subsidy for low-income working households, and the Housing Choice Voucher, a subsidy that pays the difference between 30% of household income and rent. We propose an EITC housing supplement via the tax code for markets where income and current EITC benefits are below 30% of rent levels. It will reduce the housing affordability crisis and reduce the geographic disparities of the Housing Choice Voucher. We simulate the cost at $101 billion nationally (based on 2021 figures). Varying program rules and parameters can significantly reduce costs. Piggybacking on the EITC simplifies the proposal’s implementation and increases its political palatability.

Suggested Citation

  • Peter Dreier & Seva Rodnyansky, 2024. "Earned Income Tax Credit Plus: A New Way to House the Working Poor," Urban Planning, Cogitatio Press, vol. 9.
    • Handle: RePEc:cog:urbpla:v9:y:2024:a:8526
    DOI: 10.17645/up.8526
    as

    Download full text from publisher

    File URL: https://www.cogitatiopress.com/urbanplanning/article/view/8526
    Download Restriction: no
    File URL: https://libkey.io/10.17645/up.8526?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Cutts, D.B. & Meyers, A.F. & Black, M.M. & Casey, P.H. & Chilton, M. & Cook, J.T. & Geppert, J. & De Cuba, S.E. & Heeren, T. & Coleman, S. & Rose-Jacobs, R. & Frank, D.A., 2011. "US housing insecurity and the health of very young children," American Journal of Public Health, American Public Health Association, vol. 101(8), pages 1508-1514.
    2. Saiz, Albert, 2023. "The Global Housing Affordability Crisis: Policy Options and Strategies," IZA Policy Papers 203, Institute of Labor Economics (IZA).
    3. Bastian, Jacob E. & Jones, Maggie R., 2021. "Do EITC expansions pay for themselves? Effects on tax revenue and government transfers," Journal of Public Economics, Elsevier, vol. 196(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Otto Lenhart, 2021. "Earned income tax credit and crime," Contemporary Economic Policy, Western Economic Association International, vol. 39(3), pages 589-607, July.
    2. Hicks, Jeffrey & Simard-Duplain, Gaëlle & Green, David A. & Warburton, William, 2022. "The effect of reducing welfare access on employment, health, and children's long-run outcomes," CLEF Working Paper Series 51, Canadian Labour Economics Forum (CLEF), University of Waterloo.
    3. Bastian, Jacob E. & Black, Dan A., 2024. "Relaxing financial constraints with tax credits and migrating out of rural and distressed America," Journal of Public Economics, Elsevier, vol. 234(C).
    4. Donner, Herman, 2024. "Youth Displacement in Rent-Controlled Housing: The Consequences of Housing Queues," Working Paper Series 24/6, Royal Institute of Technology, Department of Real Estate and Construction Management & Banking and Finance, revised 12 Dec 2024.
    5. Swann, Christopher A., 2017. "Household history, SNAP participation, and food insecurity," Food Policy, Elsevier, vol. 73(C), pages 1-9.
    6. Nicardo S. McInnis & Katherine Michelmore & Natasha Pilkauskas, 2023. "The Intergenerational Transmission of Poverty and Public Assistance: Evidence from the Earned Income Tax Credit," NBER Working Papers 31429, National Bureau of Economic Research, Inc.
    7. Diane Whitmore Schanzenbach & Michael R. Strain, 2021. "Employment Effects of the Earned Income Tax Credit: Taking the Long View," Tax Policy and the Economy, University of Chicago Press, vol. 35(1), pages 87-129.
    8. Felix J. Bierbrauer & Pierre C. Boyer & Emanuel Hansen, 2023. "Pareto‐Improving Tax Reforms and the Earned Income Tax Credit," Econometrica, Econometric Society, vol. 91(3), pages 1077-1103, May.
    9. Emily Brown Weida & Pam Phojanakong & Falguni Patel & Mariana Chilton, 2020. "Financial health as a measurable social determinant of health," PLOS ONE, Public Library of Science, vol. 15(5), pages 1-14, May.
    10. Leung, Charles Ka Yui, 2023. "Real Estate Market," MPRA Paper 119430, University Library of Munich, Germany.
    11. Jacob Bastian & Lance Lochner, 2022. "The Earned Income Tax Credit and Maternal Time Use: More Time Working and Less Time with Kids?," Journal of Labor Economics, University of Chicago Press, vol. 40(3), pages 573-611.
    12. Lewis, Melinda & Cramer, Reid & Elliott, William & Sprague, Aleta, 2014. "Policies to promote economic stability, asset building, and child development," Children and Youth Services Review, Elsevier, vol. 36(C), pages 15-21.
    13. Jacob Bastian, 2020. "The EITC and Maternal Time Use: More Time Working and Less Time with Kids?," Working Papers 2020-077, Human Capital and Economic Opportunity Working Group.
    14. Willison, Charley, 2017. "Shelter from the Storm: Roles, responsibilities, and challenges in United States housing policy governance," Health Policy, Elsevier, vol. 121(11), pages 1113-1123.
    15. Redonda, Agustin & de Sarralde, Santiago Diaz & Hallerberg, Mark & Johnson, Lise & Melamud, Ariel & Rozemberg, Ricardo & Schwab, Jakob & von Haldenwang, Christian, 2019. "Tax expenditure and the treatment of tax incentives for investment," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 13, pages 1-11.
    16. Montpetit, Sébastien & Beaureard, Pierre-Loup & Carrer, Luisa, 2024. "A welfare analysis of universal childcare: Lessons from a Canadian reform," CLEF Working Paper Series 73, Canadian Labour Economics Forum (CLEF), University of Waterloo.
    17. Oh, Jihyun, 2023. "Prevalence and factors associated with multidimensional child deprivation: Findings from the Future of Families and Child Well-Being Study," Children and Youth Services Review, Elsevier, vol. 148(C).
    18. Anna S. Rosofsky & M. Patricia Fabian & Stephanie Ettinger de Cuba & Megan Sandel & Sharon Coleman & Jonathan I. Levy & Brent A. Coull & Jaime E. Hart & Antonella Zanobetti, 2020. "Prenatal Ambient Particulate Matter Exposure and Longitudinal Weight Growth Trajectories in Early Childhood," IJERPH, MDPI, vol. 17(4), pages 1-15, February.
    19. Gold, Sarah & Wagner, Brandon, 2022. "Acute care utilization and housing hardships in American children," Children and Youth Services Review, Elsevier, vol. 136(C).
    20. Watson, C. Luke, 2021. "the General Equilibrium Incidence of the Earned Income Tax Credit," SocArXiv 8n3ag, Center for Open Science.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cog:urbpla:v9:y:2024:a:8526. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: António Vieira or IT Department (email available below). General contact details of provider: https://www.cogitatiopress.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.