NAHB Urging Congress to Keep Homeownership Affordable

May 15, 2013

housing affordabilityThe National Association of Home Builders (NAHB) is urging Congress to maintain its support for vital housing tax incentives, including the Low Income Housing Tax Credit, the mortgage interest deduction and real estate tax deductions, to meet the nation’s growing need for affordable rental housing and homeownership opportunities.

U.S. Census data shows that more than 40 percent of renters are “rent burdened,” or pay more than 30 percent of their household income on rent. The need for affordable rental options remains acute. The Low Income Housing Tax Credit (LIHTC) is the most effective tool for the creation of affordable rental housing. Utilizing a public-private partnership to attract investment, the program has produced and financed more than 2 million affordable rental units since its inception in 1986.

When it comes to housing and tax reform, the spotlight typically falls on the mortgage interest deduction, and Dietz set the record straight on a number of false assumptions regarding this important homeownership benefit, explaining that most homeowners will claim and benefit from the mortgage interest deduction.

Critics charge that the mortgage interest deduction encourages the purchase of a larger home, but these claims ignore the role of family size. Home owners with larger families need bigger homes and will therefore have a higher mortgage interest deduction. He also noted that the cost of housing varies greatly across the nation, so what appears to be a large deduction for a given home in one area may reflect a modest home in a high-cost area.

Moreover, the mortgage interest and real estate tax deductions are two of the few elements in the tax code that that account for differences in cost-of-living.

Noting that building 100 single-family homes creates more than 300 full-time jobs and $8.9 million in federal, state and local tax revenues that helps boost local communities and schools, Dietz said that how housing is treated in an future tax reform will shape the economy going forward.

About The Author

Read All Stories By admin

Leave a Comment