Housing Policy: A Crack in the Foundation

By England, Robert Stowe | Mortgage Banking, March 1992 | Go to article overview

Housing Policy: A Crack in the Foundation


England, Robert Stowe, Mortgage Banking


A national consensus that has shaped the very definition of America has been shattered. The once-common assumption across all segments of society and the political spectrum endorsing the quintessential American dream of owning one's home is under attack. Sure, the American people are as fervent as ever in their devotion to private home-ownership. And. in Congress, somewhere between two-thirds and 80 percent of elected officials consider homeownership one of the most sacred of all legislative sacred cows. But, in the rarifed atmosphere of public-policy debate on housing, the idea is not just increasingly suspect, it is coming under direct assault.

A redistributive tax policy appears to have gained some particularly staunch converts among housing experts in academia, in many affordable housing "research institutes" and among public housing advocates. Increasingly, in these housing policy think tanks the idea is that funding that provides housing for the poor in America should come from cutting back on the lost tax dollars that arise due to the mortgage interest deduction The new dogma gathering momentum among some seeking major new sums to house America's poor and near-poor is that the mortgage interest deduction and other housing-related tax policies valued at $65 billion a year are an unfair subsidy to the middle class and should be capped or eliminated. "At every housing conference I attend," says one of the rare, free-market, housing-policy analysts, Carl Horowitz of the Heritage Foundation, "everyone complains constantly and bitterly about the enormous middle-class subsidy" they say is found in the federal tax code.

Many low-income housing advocates and their allies who have targeted the mortgage interest deduction are waging a battle that replays in microcosm the flawed class-warfare notions of earlier notable periods in the world's political history. But this time the idea is to take housing from the middle class and rich and give it to the poor. The stakes in this ideological battle are high. If the mortgage interest deduction is severely limited or eliminated, "it would convert America from a nation of homeowners to a nation of renters," says Norm Ture, head of the Institute for Research on Economics and Taxation. "It would be tantamount to abandoning the American dream."

Publicly, however, the tendency among many low-income housing advocates is to vent their spleen at the wealthy, not the middle class, because to do otherwise would be political suicide for their agenda. The folks at the National Housing Institute in East Orange, New Jersey, lampoon the mortgage interest deduction as a "mansion subsidy," according to the institute's director Patrick Morrissey, even though mansions typically do not carry large mortgages and thereby play no noteworthy role in the benefits received from the mortgage interest deduction. The deduction, rather, seems confined to the high end to the upwardly mobile segment of the upper middle class--those in society who have earned high incomes largely based on their own entrepreneurial talents and abilities. For those favoring the curtailment of the mortgage interest deduction to generate more funds for low-income housing, there appears to be little concern for the impact that such a cap on the deduction would have on either homeownership rates or on the personal finances of current and future homeowners--an effect that many tax economists calculate as potentially catastrophic.

According to a 1989 study prepared by John Savacool for The WEFA & Group of Bala Cynwyd, Pennsylvania, a loss of the mortgage interest deduction would devastate the private housing sector and weaken the entire American economy. Savacool estimated that if the mortgage interest deduction were eliminated, the real gross domestic product (GDP) would decline by an average of $33 billion per year over what it would otherwise be. Mortgage origination volume would fall by $60 billion per year and the number of first-time buyers would be reduced by between 3 percent and 6 percent, according to the study. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Housing Policy: A Crack in the Foundation
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.