Journal Article: Examining a Proposed EITC Housing Supplement

The first issue of the Journal of Case Study Research was recently devoted to housing affordability in California, and I was pleased to have the opportunity to contribute an invited article to the journal. This article discusses a proposal to add a housing subsidy to the federal Earned Income Tax Credit. The article discusses why the EITC housing supplement is ultimately inadequate in its ability to address California’s housing affordability crisis, namely because it fails to address California’s statewide housing shortage.

Here’s a summary of the article:

Nationally, housing affordability is a growing problem, with falling homeownership rates and an increasing number of cost-burdened renters. In California, housing is particularly expensive. One proposal would add a housing subsidy to the federal Earned Income Tax Credit (EITC). This housing supplement would equal the difference between 30 percent of household income, including the EITC, and local fair market rent. Although the proposal directly addresses the definition of “cost-burdened,” the housing supplement’s simplicity makes it a rough method of addressing needs. There are administrative questions, in part concerning possible over-subsidization for certain household types. The proposed housing supplement would also significantly increase the cost of the EITC program. Most important to California’s context, though, is that the proposal would not address the state’s underlying problem: a severe housing shortage. (Read the full article.)

The Journal of Case Study Research launched its inaugural volume this summer. The journal is published by the  Center for California Real Estate, an institute dedicated to advancing real estate knowledge.

— William Chen