From his Medium page:
Anyone paying more than 30 percent of their before-tax income would be eligible for the credit, which would cover the difference between 30 percent of a beneficiary’s income and their rent (capped at the neighborhood fair market rent). According to researchers at Columbia University, the impact would be sweeping: the credit would benefit more than 57 million people, including nearly 17 million children, and lift 9.4 million Americans out of poverty. The median credit for a benefitting family would equal $4,800.
Set aside the question of whether the government should be subsidizing housing more, instead of subsidizing it less. This is insane purely as a matter of policy design.
Booker writes that “almost half” of all renters pay more than 30 percent of their income in rent, which seems to roughly align with the 57 million individuals benefiting in the Columbia research (which his post does not provide). So almost half of renters would have the option of moving to whatever neighborhood they wanted throughout the country, no matter how expensive, while paying exactly 30 percent of their income in rent, so long as they picked a place at the “neighborhood fair market rent.”
Gee, I wonder if eliminating these renters’ price sensitivity might have some unintended consequences. I wonder if the median credit might end up being more than $4,800. And I wonder what problems would result from the new 30 percent marginal tax rate — given that every time someone earned an extra $100, his rent subsidy would fall $30 to keep his rent payments at 30 percent of his income.
There’s also the fact that sky-high rents are often the product of bad local policy that limits development. This would fork over tons of federal money to subsidize such policies, though in fairness a different plank of Booker’s plan would try to discourage them. It would also subsidize living in neighborhoods and cities with high cost of living in general.
In the Green Bay, Wis., ZIP code where I grew up, fair-market rent for an efficiency unit is just $580. In the Sunnyside neighborhood of Queens, where I lived in 2008, it’s $1,700. The Upper East Side, where my wife and I crammed ourselves into a tiny fifth-floor walkup for a while shortly thereafter, when the housing crisis was still keeping rents down? $2,340 these days. So, holding income constant, someone would get more of a subsidy if they moved from Green Bay to New York — and, perhaps more troublingly, even if they moved within New York while commuting to the same exact job. Someone making $60,000 would be expected to pay $1,500 a month, so they’d get a $200 monthly rent subsidy in Sunnyside (at the efficiency rate) but an $840 one on the Upper East Side.
Is he even trying?