Maggie Hassan: Help Us, We're Stupid

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Our state's junior senator, Maggie Hassan, is one of the co-sponsors of the Rent Relief Act of 2018; she recently took to the op-ed pages of my local newspaper, Foster's Daily Democrat to advocate for its passage. Let's take a look… ooh, the beginning is not promising:

Too many families are working hard and doing all the right things, yet still find themselves struggling to afford the basics needed to thrive.

Maggie puts herself firmly in favor of hard work and doing all the right things. And families. And thriving. A brave stance!

But on to the topic at hand:

While there are many factors squeezing families’ bottom lines, one challenge that is particularly pronounced in Rockingham County is the shortage of affordable housing.

The numbers are stark. A recent study from the New Hampshire Housing Finance Authority showed that the median cost for a two-bedroom apartment has increased 19 percent over the last five years. The average hourly wage a household must earn in our state in order to afford the fair market rent for a two-bedroom rental is the 14th highest in the country. And to afford the median two-bedroom rent in Rockingham County – $1,456 a month – a renter would have to earn $58,200 a year.

You can read the cited report from the New Hampshire Housing Finance Authority here. Maggie's other numbers are from a report by the National Low Income Housing Coalition (NLIHC), an advocacy group "dedicated solely to achieving socially just public policy that assures people with the lowest incomes in the United States have affordable and decent homes." And you can read that report here. (Preface by Bernie Sanders, in case you were harboring any doubts where the NLIHC lies politically.)

These rising costs, combined with the fact that middle-class wage growth remains stagnant, are leaving hard-working Granite Staters with difficult choices in finding quality housing while remaining economically secure.

Maggie is against people having to make difficult choices. Another bold stance!

Could we get on with it, please?

The lack of affordable housing also has a major impact on our businesses. I have heard from business owners across our state who have said that they face real challenges with hiring and retaining employees because workers are struggling to find housing that they can afford.

Well, gadzooks. Apparently, Maggie faced a difficult choice herself. She could have said to the business owners, "Gee, I guess you'll have to pay higher wages to attract and retain workers, right?"

But I guess she punted on that. Her solution instead is…

To strengthen economic opportunity, it is clear that hard-working families need relief from the rising cost of rent, which is why I have joined with colleagues to introduce the Rent Relief Act of 2018.

Yes, that seems to be the first response: let's get more people dependent on government "solutions".

Under this legislation, those who live in rental housing and pay more than 30 percent of their gross income on rent, including utilities, would be eligible for a refundable tax credit. This assistance would be given on a sliding scale based on income and would phase out at high income levels. Those struggling to afford high rent would qualify for the tax credit by determining the total amount spent yearly on rent, taking into account the family’s annual income, and the federal government’s established fair market rent rates for the area.

OK, that's enough from Maggie. Let's look at some contrary views. It's not all from us right-wing troglodytes. For example:

Adam Davidson is a New Yorker writer. Not exactly a free market fundamentalist. I found that tweet via an article written by Henry Grabar in (of all places) Slate. Among Grabar's criticisms:

The policy would also create some perverse incentives for tenants and landlords alike, potentially driving up rents as landlords seek to maximize government aid. One precedent for this can be found in the Section 8 policy, where the level of federal subsidy does indeed appear to warp local markets. In 2000, HUD raised its funding limit from the 40th percentile of regional rent to the 50th. Instead of opening up new, more expensive neighborhoods to voucher recipients, the policy wound up “artificially inflating rents in some higher-poverty neighborhoods” where voucher recipients are concentrated. In high-cost cities, the Harris plan would be such a fire hose of cash that the effect would likely be to raise rents citywide—with landlords as the primary beneficiaries. You can see how the plan might spiral out of control. Rising rents would boost the region’s Fair Market Rent, triggering more subsidy. And so on.

My major criticism: Maggie is proposing a Federal solution to a problem that is mostly our own fault. I've pointed out the Cato Institute study Freedom in the 50 States before, but it's particularly relevant on this topic. New Hampshire gets very high marks overall, but…

New Hampshire’s regulatory outlook is not so sunny. Its primary sin is exclusionary zoning. It is generally agreed that the Granite State is one of the four worst states in the country for residential building restrictions.

I.e., an artificially restricted housing supply. Of course housing prices will be high here. Again, why should taxpayers in Iowa and Montana save us from our own self-inflicted stupidity?

Also see:

The only bright side is that there's a consensus that the bill is going nowhere. Why was it proposed in the first place? That Slate article linked above has a credible answer:

For Dems, this new focus on the concerns of the base makes a cynical kind of sense. Renters’ costs have abated somewhat since 2016—when this issue played no role in a marathon presidential campaign—but Democrats are newly aware that their Achilles’ heel is voter turnout. Young Americans, left-leaning and vote-shy, are locked out of homeownership by record-high home prices and low incomes, and struggling with rising rents. That is, if they’ve managed to get their own place: A record share live with parents or relatives. A record share also live with friends or strangers. Historically speaking, this is not normal: Nearly half of American renters are cost-burdened today, paying more than 30 percent of their income in rent, up from a quarter in the 1960s. And while the problem is most severe for low-income families, it persists up the wage ladder to include, in the most expensive cities, households making six figures.

In other words: it's boob bait for the Democratic bubbas.