On March 26, Representative Keith Ellison (D-MN) introduced a bill to reform the mortgage interest deduction and direct the majority of the resulting savings to the National Housing Trust Fund (NHTF).
The ”Common Sense Housing Investment Act,” H.R. 1662, is the centerpiece of the United for Homes campaign to fund the NHTF, the block grant to states designed to expand the rental housing supply affordable for extremely low income households. The bill would also provide additional resources for the Public Housing Capital Fund, the Section 8 program, and the Low Income Housing Tax Credit.
H.R. 1662 would cap the amount of a home mortgage eligible for a tax break at $500,000, down from the current cap of $1 million. Only 4.5% of all mortgages taken out from 2011 to 2013 were for more than $500,000. The bill also would convert the deduction to a non-refundable mortgage interest tax credit. These two changes would expand from 39 million to 55 million, the number of homeowners who would receive a tax break on their mortgages. Virtually all of the 16 million additional homeowners who would benefit would have incomes under $100,000 per year.
"The Common Sense Housing Investment Act provides a more generous tax benefit for more working families with mortgages and makes a significant contribution to addressing the rental housing crisis. It would enable 16 million more current homeowners with a mortgage to receive a bigger tax break. It also makes a significant contribution to the gap of seven million affordable rental homes needed for extremely low-income families,” Mr. Ellison said in a statement.
“With the new resources generated by Mr. Ellison’s bill, we can end homelessness and help ensure that every child, senior citizen, and person with a disability in America has a decent, stable, and affordable home,” said Sheila Crowley, NLIHC President and CEO. “Moreover, we can do this without costing the federal government any more money, without adding to the deficit.”
The bill is similar to legislation introduced in the 113th Congress, H.R. 1213, which was referred to the Committees on Ways and Means and on Financial Services, but was never acted on.
H.R. 1662 has five original co-sponsors, all Democrats. They are Representatives John Conyers (MI), Barbara Lee (CA), Bobby Rush (IL), Bobby Scott (VA), and Donna Edwards (MD). The bill has been referred to the Committees on Ways and Means and on Financial Services again.
The United for Homes campaign, composed of over 2,000 national, state, and local organizations (see article below), and elected officials located in all 435 Congressional Districts and the District of Columbia, endorses H.R. 1662 and pledges to work with Mr. Ellison to advance this groundbreaking piece of legislation.
Mr. Ellison’s press release is at http://ellison.house.gov/media-center/press-releases/rep-ellison-introduces-the-common-sense-housing-investment-act
NLIHC’s press release is at http://nlihc.org/press/releases/5698