Title
Adoption of Resolution Supporting United States Senate Congressional Bill S. 3250, the Rent Relief Act of 2018, to Amend the Internal Revenue Code of 1986 to Allow for a Credit Against Tax for Rent Paid on the Personal Residence of the Taxpayer. (City Manager 2110)
Body
To: Honorable Mayor and Members of the City Council
From: David L. Rudat, Interim City Manager
EXECUTIVE SUMMARY
S. 3250 creates a Federal tax credit for individuals paying more than 30 percent of their income to rent their personal residence. As drafted, S. 3250 could provide relief to 10,791 Alameda households, more than one-third of Alameda's 30,678 households.
BACKGROUND
The Alameda City Council's adoption of the 2018 Legislative Agenda includes support for measures that reduce income inequalities, including but not limited to, tax deductions for low-income renters.
S. 3250, the Rent Relief Act of 2018, was introduced in the Senate of the United States on July 19, 2018 by Senator Kamala Harris and is co-sponsored by Senators Feinstein, Blumenthal, Hassan, and Gillibrand.
Under S. 3250, eligible individuals would receive a tax credit for a percentage of rent paid over 30 percent of the individual's income.
In Alameda, 48 percent of households rent their primary residence, and 45 percent of Alameda's renters, 6,925 households, spend more than 30 percent of their income on rent.1
DISCUSSION
Under S. 3250, an individual would be eligible for a tax credit if they made under $125,000, spent more than 30 percent of their income on rent, and did not live in a property with rent that is more than 150 percent of the fair market rent.
Under this proposed legislation, if an individual earning the median income in Alameda of $45,590 paid the average rent for a 1-bedroom apartment, $2,062 ($24,744 per year), they would receive a tax credit of $8,300, 75 percent of the difference between spending 30 percent of their income on rent and the actual rent paid.
Last year, the Alameda Hous...
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