Time to Ditch the Mortgage Interest Deduction

Facts matter: Sign up for the free Mother Jones Daily newsletter. Support our nonprofit reporting. Subscribe to our print magazine.


Adam Ozimek glosses a recent study on the effects of the mortgage interest deduction in suburban areas (which are lightly regulated) vs. urban areas (heavily regulated):

Using national data from 1984 to 2007 they found that the MID did not increase overall homeownership. In areas with light land use regulation they found that homeownership among higher income families was increased, and in tightly regulated housing markets homeownership was decreased for all income groups except the lowest….We spend around $100 billion a year on this subsidy, and to the extent that its defenders are correct and homeownership does have positive externalities, it is actually making urban areas worse off.

There you go. This shouldn’t come as any big surprise, since the mortgage interest deduction was always aimed at spurring new homebuilding in the suburbs. But whether or not you think that’s a worthy goal, it apparently comes at the expense of homeownership in cities. It’s a policy that passed its sell-by date long ago. Get rid of it.

(But replace it with what? Middle class homeowners will feel hard done by if one of their cherished subsidies goes away while millionaires get huge tax cuts and hedge fund managers continue to benefit from things like the carried interest rule. And rightly so! But surely there’s some kind of bennie we could give them that wouldn’t be quite so destructive in its overall impact?)

THE TRUTH...

is the first thing despots go after. An unwavering commitment to it is probably what draws you to Mother Jones' journalism. And as we're seeing in the US and the world around, authoritarians seek to poison the discourse and the way we relate to each other because they can't stand people coming together around a shared sense of the truth—it's a huge threat to them.

Which is also a pretty great way to describe Mother Jones' mission: People coming together around the truth to hold power accountable.

And right now, we need to raise about $400,000 from our online readers over the next two months to hit our annual goal and make good on that mission. Read more about the information war we find ourselves in and how people-powered, independent reporting can and must rise to the challenge—and please support our team's truth-telling journalism with a donation if you can right now.

payment methods

THE TRUTH...

is the first thing despots go after. An unwavering commitment to it is probably what draws you to Mother Jones' journalism. And as we're seeing in the US and the world around, authoritarians seek to poison the discourse and the way we relate to each other because they can't stand people coming together around a shared sense of the truth—it's a huge threat to them.

Which is also a pretty great way to describe Mother Jones' mission: People coming together around the truth to hold power accountable.

And right now, we need to raise about $400,000 from our online readers over the next two months to hit our annual goal and make good on that mission. Read more about the information war we find ourselves in and how people-powered, independent reporting can and must rise to the challenge—and please support our team's truth-telling journalism with a donation if you can right now.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate