The bill comes on the heels of a report by the California Housing Partnership showing that rents surged 20% statewide from 2000-2012, while median income fell by 8%. Cost-burdened renters are struggling and need help. At the hearing, speakers emphasized the need for greater equity, as homeowners currently receive a range of tax advantages, while renters receive virtually nothing.
“Compared to homeowners, renters really shouldered the burden of cuts to help California cope with its budget crisis,” said co-author Ting. “As state finances improve, our tax policy cannot continue treating renters as second class citizens. Housing is expensive in California and this fact of life places pressures on working families still waiting for the economic recovery to benefit their bottom line.”
“California homeowners receive significant state and federal tax benefits, including the mortgage interest deduction and the homeowner’s exemption,” commented co-author Daly. “It’s reasonable to provide renters, who may not be able to purchase a home, with some tax relief, too. Housing is a fundamental need for all California families.”
San Francisco tenant Mira Ingram attended today’s hearing to provide testimony as a witness about the importance of the renters’ rebate. “For many people like me,” said Ingram, “the renters’ rebate helps cover our basic needs.” Ingram is a disabled tenant who used to rely on the rebate to pay for wheelchair maintenance before the program was defunded in 2008.
The renters’ rebate was in effect for decades former Governor Schwarzenegger used his line-item veto to eliminate tax rebates to low-income elderly and disabled renters. It was his single biggest line-item veto in the budget, eliminating all funding for renters under the Senior Citizens Renters Tax Assistance program. The veto was widely condemned at the time. Tenants Together led the opposition to the veto, but with the spiraling economy at the time, elected officials were not prepared to bring the rebate back in the years that followed. Advocates believe the rebate is now more viable given a stronger statewide economy.
AB 2175 would improve upon the prior program by extend the program to all low-income renters, not just those who are senior or disabled. Under the bill, tenants in households earning less than $42,588 would receive an annual rebate check of $250 - $348, depending on their income level.
The bill passed the Revenue & Tax Committee of the Assembly by a 6-3 vote. Next, it heads to the Appropriations Committee.