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Rental assistance has particularly strong benefits when it enables families with children to live in low-poverty neighborhoods.Children whose families use vouchers to move to such neighborhoods when they are young earn significantly more as adults and are far more likely to attend college and less likely to become single parents.

Creating a renters’ tax credit would improve the match between federal housing spending and need.Research shows that housing vouchers — which like the proposed credit enable poor families to live in decent, stable housing while paying around 30 percent of their income — greatly reduce homelessness and housing instability.In addition, housing vouchers provided to homeless families lower the chance that a child will be removed from its family and placed in foster care (which often occurs because parents cannot afford suitable housing), reduce the frequency with which children must move from one school to another, and lower rates of behavioral and sleep problems among children and psychological distress and domestic violence among the adults with whom children live.In addition to extending rental assistance to more families, a state-administered renters’ credit would offer opportunities for coordination with other state-run programs.(This coordination is difficult to achieve through existing rental assistance programs, which are mainly locally administered.) For example, states could use the renters’ credit to reduce rents in LIHTC developments to levels affordable to poor households, help families participating in Temporary Assistance for Needy Families (TANF) for whom lack of stable housing is a barrier to work, provide supportive housing to families at risk of having their children placed in foster care, and enable Medicaid-eligible elderly people or people with disabilities to live in service-enriched developments rather than nursing homes or other institutions.

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