Everyone should be able to afford a roof over their head and a safe place to make a home. Yet safe and affordable housing has moved further out of reach for many Washingtonians. Over the last two decades, Washingtonians have faced rising housing costs that have outpaced growth in wages. Median rent in the state grew by 32% while the median renter household income only increased 20%. What’s more, the majority of Washingtonians with the lowest incomes are housing cost-burdened – meaning they spend one third or more of their monthly income on rent. This session, lawmakers can help alleviate housing-cost burden and bring greater stability to individuals and families by enacting an expanded Working Families Tax Credit.
The Working Families Tax Credit is our state’s version of the federal Earned Income Tax Credit (EITC). Nationally, the EITC is one of the most successful federal anti-poverty programs, and decades of research has found it to be an effective tool for lifting people out of poverty, increasing employment, and improving the earnings of recipients.
A recent study found that the EITC can also impact housing stability. In particular, for unmarried mothers with low incomes, receiving an additional $1,000 annually from the EITC:
- Reduced the amount of monthly earnings that they would need to use on rent
- Provided opportunities for them to move out of shared or crowded living arrangements
- Increased the likelihood that they could lease or take on a mortgage for a home
If enacted, the Working Families Tax Credit could further reinforce and enhance the positive housing and economic benefits of the EITC. This session, lawmakers should enact this state tax credit to support the economic well-being of nearly one million households in Washington.