Giving Compass' Take:
- Yonah Freemark shares policy solutions that can help to support families with low incomes as rent and gas prices soar.
- What role can you play in addressing the consequences of inflation?
- Learn how you can address the urgent need for affordable housing.
What is Giving Compass?
We connect donors to learning resources and ways to support community-led solutions. Learn more about us.
Driven by the COVID-19 pandemic, a shaky recovery from 2020’s recession, and, now, the war in Ukraine, inflation has shot up in the United States and in countries worldwide. For Americans, recent dramatic surges in gas prices and rent have increased the costs of daily life at a quicker rate than wages.
Households with low incomes—who are disproportionately people of color—will likely be particularly affected by these changes. Most low-income workers—like most Americans—commute by car, and though electric vehicles are gaining popularity, few Americans currently have them, and those who do are relatively wealthier on average (PDF).
Moreover, families under the federal poverty level are much more likely to rent their homes than own them, exposing them to fluctuations in housing costs as landlords raise rents.
To address the needs of families with low incomes, policymakers at the local, state, and federal levels can develop short- and long-term strategies to address rising housing and transportation costs. These approaches could focus on efforts to stabilize rent, prevent evictions, and give people alternatives to driving, both by providing better options and by designing communities that prioritize pedestrians, cyclists, and transit riders.
What strategies could ease cost burdens for people with low incomes?
Policymakers at the local, state, and federal levels have an opportunity to identify solutions that help families with low incomes in the short term while combating the conditions that expose them to inflation-related problems in the long term.
In the short term, some officials have promoted the idea of pausing the collection of federal and state gas taxes. Yet these taxes help pay for roadway maintenance, and pausing them is unlikely to reduce gas prices much, if at all.
Even if such a strategy reduced prices, it would incentivize more driving—a concern given automobiles’ large contributions to greenhouse gas emissions and continued roadway congestion.
Instead, policymakers could consider the following:
- Continuing to identify mechanisms to help renters remain in place by enacting policies to reduce evictions. Localities and states could target some of their unspent federal fiscal recovery funds and emergency rental assistance to keep renters housed.
- Reducing local transit fares, increasing bus service, and creating temporary street improvements for transit and biking that give people real alternatives to driving. This could ensure more people don’t have to rely on cars to get around.
- Significantly expanding the federal government’s Housing Choice Voucher Program. This deep subsidy for low-income renters could insulate people already living in apartments from steep rent increases.
Read the full article about policies to help families with low incomes by Yonah Freemark at Urban Institute.