The rent is too damn high (and rising)

The rent is too damn high (and rising)

The pandemic wreaked havoc on the physical, mental and economic health of low-income communities, which are disproportionately Black and Brown. As these families begin to recover, rising inflation could eat up historic gains in wages and the important benefits of the Child Tax Credit. But policymakers can curb the impact of one of the largest drivers of inflation – housing costs – through smart investments that will help families who need it most. Sammi Aibinder and Lindsay Owens of the Roosevelt Institute provide analysis of rising rental costs and recommendations to address this enduring crisis: 

History shows us we cannot expect the private market to develop or sustain affordable housing to meet the needs of millions of people; ensuring stable shelter for all will require major investment and a reshaping of public power in our housing markets. In particular, policymakers should: Fund a major increase in the supply of affordable housing, especially social housing – alleviating supply constraints that have been at the center of increasing rents for decades – and by extension, work with municipalities to adopt new forms of zoning regulation that can enable that increase in supply of affordable housing; and Pursue rent stabilization policies (i.e., rent control) to curb future price hikes and rent profiteering.

“A Big Win” for Louisiana
The $1.2 trillion infrastructure bill will go a long way toward addressing Louisiana’s backlog of unfunded infrastructure needs, including in rural areas that are too often overlooked. Local officials are weighing in on the anticipated impact of overdue and transformational funding for their communities. JC Canicosa and Wes Muller of the Louisiana Illuminator report:

In Louisiana, reportedly about 400,000 to 500,000 households don’t have broadband access, but the state official in charge of broadband development said he believes that’s a lowball estimate. With Louisiana expected to receive $7.2 billion from the Infrastructure Investment and Jobs Act, the funding is welcomed by Rick Allen, the mayor of Leesville in Vernon Parish — where only about 20 percent of residents have broadband access. “In the bigger cities, they don’t have the lack of internet service like we do in rural areas,” Allen said. “So I think this is one of the areas where we will benefit more than the big cities do.”

Building Better Child Care
Quality child care is essential, but is often unavailable or unaffordable for struggling families and unsustainable for the teachers who earn too little to care for our youngest students. The Build Back Better framework includes an overdue investment in universal pre-k through a federal-state partnership that would raise quality standards, lower costs for families and increase wages for teachers as required qualifications increase. Under the current framework, 60,000 Louisiana 3- and 4-year-olds would gain access to high-quality preschool. Andrea Noble of Route Fifty reports on the benefits of the investment:

Research has overwhelmingly found that children benefit from attending pre-K. They are better prepared for school, less likely to be held back, demonstrate better cognitive and language skills in kindergarten and have fewer behavioral problems in the classroom. The latest version of (President) Biden’s social spending package would provide $400 billion in funding for expansion of both universal pre-K and child care.

Dynastic wealth
The estate tax is an essential part of the U.S. tax code, providing an important stopgap to dynastic wealth accumulation and soaring inequality. However, billionaires often dodge this tax and pass tax-free wealth to their heirs through grantor retained annuity trusts (GRAT). The Build Back Better plan provides an opportunity for reform, but important provisions were stripped during negotiations. Congress can restore more fairness to the tax code by adding them back. Carl Davis of the Institute on Taxation and Economic Policy explains: 

The GRAT is such a powerful and straightforward way to dodge the estate tax that lawyers who help their clients employ the strategy have referred to it as an “off-the-shelf solution” for tax-averse wealthy people. All told, the lawyer who pioneered the use of GRATs estimates that they sliced the estate and gift taxes by about one-third between 2000 and 2013, for a loss of about $100 billion in federal revenue over that period and billions more in states that levy estate taxes.

Number of the Day
88,062 – Number of Louisiana students who would benefit from a $550 increase in the maximum Pell Grant awards in the Build Back Better framework. (Source: The White House)