Over 2,300 individuals, elected officials and organizations have endorsed the United for Homes (UFH) campaign to make modest reforms to the mortgage interest deduction (MID) to provide tax relief to more low and moderate income homeowners and to reinvest the savings into rental housing solutions to end homelessness and housing poverty. On Wednesday, January 11, NLIHC will relaunch the UFH campaign with a webinar at 2:00 pm ET for the campaign’s current endorsers. This first webinar will include previews of new advocacy tools and research to help spread the message about reinvesting savings from tax reform into affordable housing programs that serve families with the greatest need. An additional webinar will be scheduled in February for all advocates of affordable housing who wish to learn more about the UFH campaign.
With comprehensive tax reform a top priority for the new administration and Congress, and with reforms to the MID being actively considered by key policymakers, we have a tremendous opportunity to increase rental housing resources for the lowest income households while also benefitting lower income homeowners—without any additional cost to the federal government.
The federal government spends approximately $200 billion each year to help Americans buy and rent their homes. Three-quarters of those resources goes to subsidize higher income homeowners—most of whom would be stably housed without the government’s help—through the MID and other homeownership tax breaks. Just one quarter is left to assist the poorest families with the greatest needs. Each year, we spend more to subsidize the homes of 7 million households with incomes over $200,000 than we do to help the more than 55 million households with incomes of $50,000 or less, those far more likely to struggle to afford housing.
The MID is our nation’s largest housing subsidy, but it is poorly targeted, primarily benefitting America’s highest income households. According to the Congressional Budget Office, the nation’s top 20% wealthiest households receive 75% of the benefits of the MID and the top 1% get 15% of the benefits. Four out of every 10 dollars spent on the MID benefit families earning more than $200,000 a year, and 8 out of every 10 dollars goes to families making more than $100,000. Three-fourths of all taxpayers - households who rent and approximately half of all homeowners, those who take the standard deduction on their taxes - do not benefit from the MID. Moreover, economists agree that the MID does little to promote homeownership: those who benefit from the MID would choose to buy a home whether or not they were receiving the tax benefit.
The UFH campaign calls for lowering the portion of a mortgage eligible for tax relief from $1 million to $500,000 and converting the deduction to a nonrefundable credit. These two changes would a) give tax relief to 15 million lower income homeowners who do not currently benefit from the MID and b) generate approximately $241 billion in savings over ten years to invest in affordable housing programs serving the lowest income families with the greatest needs.
With tax reform on the near horizon and leaders like House Speaker Paul Ryan (R-WI) on record recognizing the logic of lowering the MID cap, NLIHC and the UFH campaign will work to ensure that any savings from MID reform be kept in the housing sector to benefit lower income households.
We urge all UFH endorsers to join the January 11 webinar and to help us promote this campaign broadly. Years of hard work by affordable housing advocates have led to this moment—let's seize this opportunity and ensure that we are all United for Homes!
If you are a current UFH endorser, register for the webinar at: http://bit.ly/2hbONus
If you are not already a UFH endorser, please join the campaign at: http://nlihc.org/unitedforhomes/support
If you are not sure if you are a UFH endorser, check the list of endorsers at: http://bit.ly/2hXD7O1