Biden’s Child Benefit Will Make Rent Affordable for Half a Million American Families With Children

Photo by Daniel Thomas

The newly enacted child tax credit has the potential to reduce the number of rent-burdened households with children by nearly 9%.

By Dana Anderson

The newly enacted child tax credit, which will put an average of $221 per month into the pockets of families earning $150,000 or less with children, would make housing go from unaffordable to affordable for roughly half a million American families.

Just over 5 million families in that category nationwide would be rent-burdened—meaning they spend more than 30% of their gross income on rent—with the credit, down 8.6% from about 5.5 million families before the introduction of the credit.

The child tax credit, part of the newly approved $1.9 trillion economic stimulus bill that some analysts predict could cut child poverty in half, isn’t meant to directly tackle housing affordability. But because paying for housing is a major expense in raising children, this report analyzes how the bill could decrease the burden of paying rent for families with children. The credit would have a small but significant impact on helping a more reasonable portion of income go toward rent, but federal and state governments should focus on permanent strategies to make housing available and affordable for all Americans.

It’s just one provision that will provide financial help to low- and middle-income Americans—the bill also provides stimulus checks and extended unemployment benefits, among other things. But the child tax credit has the potential to become permanent, which means it could have a bigger long-term impact than the bill’s other provisions.

“Although the expanded child tax credit would make housing affordable for many low- and middle-income families, a huge number of them would remain rent-burdened, particularly in expensive parts of the country,” said Redfin Chief Economist Daryl Fairweather.

“That speaks to the severity of the housing affordability crisis in this country.”

The research in this report finds that nearly half of the American families included in this analysis are currently rent-burdened. Although that share would be reduced to about 45% with the child tax credit, that’s still a large portion of middle-class families who have a hard time paying rent.

“The stimulus package and tax credit are a promising start and they will certainly help a lot of families pay rent and put food on the table,” Fairweather continued.

“But it’s critical that the Biden administration implement long-term policies that substantially increase the supply of affordable housing to improve housing security for low-income families and help abate the homelessness crisis.”

The child tax credit provides a $3,000 annual benefit for each child aged 6 to 17 and $3,600 for each child under the age of 6, with the full credit available to couples earning up to $150,000. That’s up from the previous credit of $2,000 per child. Redfin’s analysis compares the number of households that earn less than $150,000 with children that were rent-burdened before the new  tax credit to the number that would be once the credit goes into effect. The analysis calculates the average amount families will receive in child tax credits by metro area, taking into account the average number of children in each age range in that metro. The data in this report is from the U.S. Census Bureau’s 1-year American Community Survey for 2019.

The median family included in this analysis has two children, pays $1,294 in monthly rent and earns $50,247 per year.

The credit provision will have the biggest impact on low-income families in relatively affordable areas like El Paso and Raleigh, mainly because extra money goes further in places where rent and other costs are already less expensive. It will have a smaller impact on pricey areas like the Bay Area and Los Angeles.

See the table at bottom of original article for metro-level detail on the potential impact of the child tax credit on paying for housing.


As a data journalist at Redfin, Dana Anderson writes about the numbers behind real estate trends. Her dream home is either on the beach or in the mountains, but either way, it has a comfortable window seat and cozy fireplace.

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