The Urban Institute held a panel discussion, “Apartment Demand for the Next 15 Years: Can We Meet the Need?,” on July 13. The event included a discussion about the potential impacts of mortgage interest deduction (MID) reform.
Paige Mueller of Whitegate Real Estate Advisors predicted that the demand for rental housing will require the development of 4.6 million new multifamily units by 2030. Jamie Woodwell of the Mortgage Bankers Association explained the natural trends of the housing market from an economic perspective, emphasizing that the changes we see in housing costs are normal but require local and federal intervention. The cost to develop affordable housing is the same as market-rate housing, he said, and federal subsidies and other tools are necessary to incentivize affordable housing developments. Priya Jayachandran of Volunteers of America cited NLIHC’s Out of Reach report, which found that on average a minimum wage earner in America must work 117 hours per week to afford a two-bedroom rental home. She also noted the important role that local stakeholders, especially mission-based developers and owners, have in improving the availability of affordable housing.
When discussion opened to the audience, concerns were raised that reforming the MID may negatively influence homeownership rates. Laurie Goodman of the Urban Institute disputed this claim and argued that the MID does not have an impact on individuals’ decisions to purchase homes because it largely subsidizes the mortgages of the highest earners in the U.S.
Read more about the real burden of rent payments in the U.S. in NLIHC’s Out of Reach report here.
Read more about the MID here and about the United for Homes campaign to make modest reforms to the MID to benefit lower income homeowners and to generate $241 billion over ten years to invest in affordable housing solutions at: http://www.unitedforhomes.org/.