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Gas prices fall, rents keep rising

The average price of gasoline in the United States peaked in mid-June at just over $5.00 per gallon. But long before it reached that dizzying height, lawmakers from both major parties and from every region of the country had caught the eye, proposing policies designed to offset the rising cost of driving.

At the end of April, as Governing reported, many states had offered to suspend their gasoline taxes or offer tax refunds to their residents. Some have sought to tie these discounts directly to car ownership. California Governor Gavin Newsom initially proposed giving drivers a $400 rebate per car they owned, a suggestion that later evolved into a general rebate for taxpayers who met certain income limits.

Josh Shapiro, the Democratic candidate for governor of Pennsylvania, has offered to send residents $250 per car, up to four cars per household. President Joe Biden decided to open up the country’s strategic oil reserves in late March in a bid to control gas prices, and publicly urged service station owners to lower their prices.

Gasoline prices have now declined for two consecutive months and last week fell below $4.00 per gallon for the first time since the start of March. What hasn’t gone down is the cost of housing, which is already a much larger share of a typical family’s budget than gas costs and is often the single biggest cost a household support each month.

According to Apartment List, the average rent is 12% higher today than it was this time last year, and rent prices in New York City hit record highs this summer. Meanwhile, housing advocates are still struggling to get Congress and the Biden administration to commit to large-scale investments in housing production or voucher subsidies, or to enact new protections for housing. tenants.

Why are rising gas prices motivating political leaders to act so urgently, while the unaffordable housing crisis is slowly spiraling out of control in the background?

One of the reasons politicians react to fluctuating gas prices is because of their visibility and how quickly people notice when the price goes up, says Jorge González-Hermoso, associate fellow at the Metropolitan Housing and Communities Policy Center in the Urban Institute.

“You go to the gas pump and you see the number. You know very well how much it costs to fill the tank, so for a consumer it is something that really impacts the psyche,” says González.

On the other hand, he says, many people don’t experience rising housing costs on a weekly or even monthly basis. Landlords can make roughly the same mortgage payment for years, and even the most vulnerable tenants don’t see their rent go up every month. It’s also easier for a state to temporarily remove a gas tax — even if it will have a small impact on a typical resident’s budget — than to tackle the thick of local regulations and the costs of labor and supply chain that are slowly driving up the price of housing. to the top.

“What’s driving housing prices so high are a lot of very different, very macro-economic trends, particularly the housing shortage,” González says. “And it’s not something you as a government can really fix in a single year.”

Gasoline prices are fueling the cost conversation because “the numbers are lit up in the sky and we have to look at them every day,” says Tara Raghuveer, director of the Homes Guarantee campaign at People’s Action, a national progressive group. But there is also a different set of expectations around housing.

“When gas prices are high, people recognize that’s abnormal and bad,” Raghuveer says. But they “take for granted that the rent will not be affordable and that it will always increase”.

It is also true that people from all socio-economic backgrounds are feeling the pinch of rising gas prices, while rising rents hit the poor and people of color particularly hard, who are not well represented in the corridors of power, she says. Last week, People’s Action helped coordinate a delegation of tenants that traveled to Washington, DC, to meet with the Federal Housing Finance Agency. The campaign is calling on Biden to declare a national housing emergency and for the FHFA to impose rent regulations on properties with federally guaranteed mortgages.

One of the tenants who traveled to Washington with the Home Guarantee campaign was Vanessa Armour, a 68-year-old U.S. Postal Service retiree who lives in Las Vegas. Armor says the building she lives in has a federally guaranteed mortgage and the landlord has repeatedly pressed tenants with rent increases and unpredictable fees. She rented the apartment two years ago for $1,100 a month, but after increases and fees — including fluctuating sewer and trash fees, pest control fees, and mandatory liability insurance – she now pays over $1,500 a month. And she knows other tenants who have it worse.

Armor says it has also been hit by other inflationary price increases, from food to gasoline. But rent is by far the biggest cost, and she often finds herself with no more than $200 to spend in a month after paying her other bills. She was told that she earned too much between her pension and a part-time job as a cook to qualify for affordable housing for the elderly. But she doesn’t earn enough to afford a decent place in the private market.

“They need to do something about these landlords who have gone crazy and are just scamming us,” she says.

Raghuveer notes that while the growth rate of inflation has slowed recently, it’s not going to come down significantly as long as rents continue to rise. As gas prices soared, Biden and other political leaders argued that gas companies were taking advantage of the inflationary trend, charging more than they should because they knew they were. could. They haven’t used the bully pulpit in the same way against landlords, the biggest of which are making bigger profit margins than before. In order to prevent many more tenants from sliding into homelessness, says Raghuveer, officials may need to try something new.

“My question is how motivated they are to do something that will inevitably feel risky, inevitably be innovative, and inevitably be legally challengeable, but would bring material relief to people today,” she says.

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