The era of historic renter militancy has just begun in this country. Thousands rallied in mid-September 2016 in 52 cities in 19 states for a Renters’ State of Emergency, chiefly concerning rent gouging and unjust evictions, largely due to monumental shortages of affordable housing. They’ve taken to the streets, city hall chambers and courts. They’ve picketed slumlords and got tough with rapacious landlords profiting from housing demand exceeding supply.
Moreover, protesters are getting organized locally and nationally through organizations like Homes for All, Tenants Together and Chicago’s Autonomous Tenants Union. Renter ranks have grown to 111,118,927, increased by the 7,300,000 homeowners who lost their homes from the 2008-era economic crash.
For dispossessed homeowners, ruined credit was bad enough, but they also faced a seven-year ban on rebuying, and lost the traditional social status favoring property owners over renters.
Perhaps the most infuriating blow was losing their mortgage-interest deduction from income taxes. It was not chump change. The average refund in 2015 was $3,218. Those paying $2,000, say, in monthly rent, might be interested to know what their 3.80 percent deduction rate would have fetched in refund checks if the Internal Revenue Service (IRS) permitted applying that deduction to rents. (The most galling aspect is knowing — as from antiquity — that part of rent pays the landlords’ mortgage interest.)
Renters’ Tax Deduction Shown at 3.80 Percent
The table below shows what the mortgage-interest deduction would be if the current fixed 15-year/30-year/FHA 30-year mortgages were applied to rent.
If five millennials rented a house or apartment on that basis, the person writing the collective monthly check to the landlord would just apportion a five-way split on the tax refund — pro-rated by when each moved in. The landlord wouldn’t care as long as the IRS permitted this “double” deduction.
In a straw poll at my…