Mortgage Interest Deductions
“This country does have a national housing policy,” said Kate Hartley, director of the San Francisco Mayor’s Office of Housing and Community Development. “And that is that we provide our greatest subsidies to relatively affluent, housed people.”
Homeowners get the mortgage interest deduction, which has cost the federal government more than these programs for the poor combined (see table above). Other tax changes mean that fewer homeowners will now claim the mortgage deduction, and its benefits will be even more heavily concentrated among the rich.*
"Lower-income renters are far likelier than homeowners or higher-income renters to pay very high shares of their income for housing and to experience problems such as homelessness, housing instability, and overcrowding." Understatement of the Year candidate.
Here in Portland, if you think things are very different think again. We don't have a lottery, yet. My friend, Pauline, 81 just qualified for an affordable apartment after being on the "wait" list for four years. And Portland didn't have inclusionary housing (IH), affordable units mixed in with market rate in the same property until SB 1533 in February 2016, so all this growth experienced here in market rate apartments has not benefited the low income folks in the market for an affordable apartment quite yet. The real estate developers slammed through as many projects as possible before the IH program kicked in to evade having to include below market rate housing in their projects. Not that the numbers are overwhelming.
Between February 1, 2017 and February 1, 2018, permits were filed for a total of 17 development projects that were subject to mandatory IH requirements. Twelve of the 17 development projects that were subject to IH requirements were privately financed. They included 565 market-rate residential units and 89 affordable units (15.7%). Of the 89 affordable units, 69 units are provided at 80% MFI and 20 units are provided at 60% MFI. (article here)
And how are most affordable housing units financed? What should we be paying attention to? Tax credits. See chart below. Who gives tax credits? Aha. Now that's a process, P2C2D, in the code book, that is almost too complicated to describe.