$241 Billion Through Mortgage Interest Deduction Reform Could Be Invested into Housing to End and Prevent Homelessness
The need to reform the mortgage interest deduction (MID) was the subject of a February, 6, 2017, op-ed in The Hill by Diane Yentel, President & CEO of the National Low Income Housing Coalition (NLIHC) wrote with Mark Calabria, director of financial regulation studies at the Cato Institute.
“As the Senate considers the nomination of Steven Mnuchin for the role of Treasury secretary, members of Congress should just as seriously vet new opportunities for comprehensive tax reform. Indeed, Congress has a clear opportunity to enact tax reform that addresses the growing affordable rental housing crisis facing millions of low-income people in every state and community.”
Yentel and Calabria write how the issue brings together two unexpected allies. They agree that scarce federal resources should be targeted to those who need them the most, not to higher income homeowners as does the MID.
With the MID, Congress has a clear opportunity to enact tax reform now that can address the growing affordable rental housing crisis in America.
The NLIHC-led United for Homes campaign advocates for reducing the portion of a mortgage eligible for a tax-write off, making the deduction a credit.
The Campaign also supports investing the $241 billion saved through these reforms into programs like the national Housing Trust Fund and rental assistance that benefit those with the greatest needs.
“The result would be $241 billion in savings over 10 years. The savings could be reinvested into critical rental housing solutions—like the national Housing Trust Fund and rental assistance—for those families with the most acute needs: those who are homeless or who are one crisis away from being homeless.”
These changes would ensure that federal housing dollars reach low income renters and homeowners, while simplifying the tax code and reforming a wasteful program.
Yentel and Calabria make the point that sensible reforms to the MID direct scarce federal funds to those most in need. These reforms should draw support from both Republicans and Democrats.
The NLIHC is committed to working with experts and policy makers with different political views. This bi-partisan work is necessary to ensure that low income people have access to affordable and decent homes.