Representative Keith Ellison (D-MN) introduced H.R. 1213, the Common Sense Housing Investment Act of 2013, on March 15. The legislation would modify the mortgage interest deduction to fund the National Housing Trust Fund (NHTF), as well as other programs aimed at expanding the supply of housing affordable to extremely low income (ELI) and very low income (VLI) households. Mr. Ellison first introduced the bill at the end of the 112th Congress. However, the measure was not acted on before the end of the session and therefore has been reintroduced, with modifications, in this new Congress (see Memo, 1/2).
Specifically, H.R. 1213 includes the modifications to the mortgage interest deduction proposed by NLIHC. The measure would lower the cap on mortgage interest for which a household can get a tax break from $1 million plus $100,000 in home equity loans to $500,000, and would convert the deduction to a 15% non-refundable credit.
These two changes to the mortgage interest deduction would result in approximately $197 billion in savings over ten years. The measure would expand the benefits of the mortgage interest tax break to an additional 16 million Americans, 99% of whom have incomes under $100,000. The bill calls for these modifications to be phased in over five years.
H.R. 1213 would apply the majority of these savings, estimated by Mr. Ellison’s office to be approximately $109 billion over 10 years, to the NHTF. The measure would also apply a portion of the savings to the Low Income Housing Tax Credit, the Section 8 tenant-based and project-based rental assistance programs, and the Public Housing Capital Fund. The bill has been referred to the House Committees on Ways and Means and Financial Services. Representative Bobby Scott (D-VA) is the original cosponsor.
“The National Low Income Housing Coalition applauds Representative Ellison for his groundbreaking legislation that will invest billions of dollars to solve the acute shortage of housing that poor people can afford and not cost the federal government anything. The bill would make modest reforms to the mortgage interest deduction that will make it work better for low and moderate income homeowners. At the same time, these changes would save $200 billion over ten years to be used to fund the National Housing Trust Fund and other low income housing programs. It truly is just a common sense policy idea that ought to appeal to all reasonable people,” said Sheila Crowley, President and CEO of the National Low Income Housing Coalition.
NLIHC has endorsed H.R. 1213 and urges its members to contact their congressional Representatives and ask them to cosponsor the measure.
In other NHTF news, the Senate’s non-binding budget resolution (see article elsewhere in Memo) includes a deficit-neutral reserve fund to assist working families that allows, in part, funding for the National Housing Trust Fund. The inclusion of this provision is due to the efforts of Senator Jack Reed (D-RI) and Budget Committee Chair Patty Murray (D-WA), both longtime champions of the NHTF.
The full text of H.R. 1213 is attached.