National Association of Home Builders Revises Stand on Housing Tax Policy

The National Association of Home Builders (NAHB) announced on October 3 that its leadership had voted to “revise” its stand on housing tax policy. "This is the first time in NAHB’s 75-year history that we have been open to the idea of broader options regarding housing tax incentives," said Granger MacDonald, NAHB chairman. "Now is the time to reform tax policy, and housing will not be left behind in this process." NLIHC applauds this shift by the Home Builders as it broadens support for reforming the mortgage interest deduction (MID) – a $70 billion tax expenditure that primarily benefits higher income homeowners and diverts nearly $11 billion annually to the top 1% of earners in the country. The NAHB’s announcement also builds momentum for more of the housing sector to coalesce in support of maintaining the savings from MID reform in housing. 

The NAHB joins a growing chorus of experts from across the ideological spectrum that are increasingly calling for reforms to the MID. Research shows that the MID does not promote homeownership, increases income inequality, and fuels the racial wealth gap. At a time when our nation’s affordable rental housing crisis is reaching new heights and impacts every state and community, Congress should embrace smart, modest reforms to the MID to ensure that more low and moderate income homeowners receive a tax break, reinvesting the savings into affordable rental homes for people with the greatest needs.

The recently announced Republican tax framework calls for indirect changes to the MID by nearly doubling the standard tax deduction, which would make the MID even more regressive as only the wealthiest families with the largest mortgages would claim the deduction: it has been estimated that those claiming the MID could drop from 35 million to 6 million tax filers. (Read a press statement by NLHC President and CEO Diane Yentel on the Republican tax framework at:

The NLIHC-led United for Homes campaign calls for direct reforms to the MID: reducing the amount of a mortgage eligible for a tax break from $1 million to $500,000 – impacting fewer than 6% of mortgages nationally – and converting the deduction into a credit, providing a greater tax break to 25 million low and moderate income homeowners. These reforms would generate $241 billion in savings over 10 years that should be reinvested into affordable rental housing solutions, like the national Housing Trust Fund and rental assistance, for families with the greatest needs – not used to pay for lowered tax rates for billionaires and corporations.

NLIHC commends NAHB’s decision to take a constructive approach to reforming the MID and urges Congress and the administration to seize the opportunity of tax reform to assist homeowners with modest means and to help end homelessness and housing poverty in the U.S.

See NAHB’s statement and a Politico article on the NAHB vote.  

See a press statement from NLIHC President and CEO Diane Yentel on the NAHB vote.