Rent or mortgage payments typically take the biggest bite out of a family’s budget.
“As these costs become bigger and bigger, you have a lower amount of money to spend on non-shelter related expenses,” says Michela Zonta, senior policy analyst with the Center for American Progress. “This is very critical for working-class families…. It would leave a small amount of money for education, for food.”
Among Americans who rent, nearly half pay more than 30% of their income toward those monthly payments, says Zonta.
Sen. Elizabeth Warren of Massachusetts says that by boosting the supply of affordable housing, she would cut rents by 10%.
Meanwhile, Sen. Bernie Sanders of Vermont says his administration would spend $2.5 trillion to create nearly 10 million “permanently affordable housing units,” according to his website. And former New York City mayor Mike Bloomberg also pledges to pave the way for hundreds of thousands of new units.
Bloomberg would make sure those earning no more than 30% of a community’s median income could get housing vouchers, and would offer down payment assistance to renters trying to buy a home.
Former vice president Joe Biden says he will spend $640 billion over a decade to make sure all Americans can attain affording housing. That includes helping people with the down payment for a home through a tax credit they can access in advance, as well as federal aid to help cover rent payments.
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Housing is key reason for racial wealth gap
Housing is critical for building equity and wealth that can be passed on to children and grandchildren. Discrimination in lending, as well as predatory financing that focused on African Americans in the years before the 2008 recession, have been key reasons for the wide wealth gap between blacks and whites, experts say.
Warren’s bill would offer grants to people living in areas that were once legally segregated or subjected to the discriminatory lending practice known as “redlining.”
The monies could be used to make a down payment on a first home in any community.
Trump administration makes cuts, preserves rental aid for current families
In its proposed budget for next year, The Trump administration said it would cut “wasteful programs that have failed to demonstrate effectiveness,” including the community development block grant.
The cuts would save taxpayers nearly $5 billion, and shift the focus on such initiatives to state and local officials that the administration says “are better equipped to respond to local conditions.”
The fiscal plan would, however, preserve rental aid for 4.6 million families.
Follow Charisse Jones on Twitter @charissejones